CIRCULAR LETTER. To: The BM&FBOVESPA Market Participants BOVESPA and BM&F Segments. Trading via DMA Launch of the Co-location Trading Model.

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1 May 18, /2009-DP CIRCULAR LETTER To: The BM&FBOVESPA Market Participants BOVESPA and BM&F Segments Re.: Trading via DMA Launch of the Co-location Trading Model. We hereby inform you that BM&FBOVESPA will authorize trading via co-location (DMA model 4, as defined in Circular Letter 021/2008-DP, of July 8, 2008) for the BM&F and BOVESPA segments. Trading via co-location will begin on June 15, 2009 for the BM&F segment and is expected to begin in the third quarter of 2009 for the BOVESPA segment, subject to approval by the Brazilian Securities and Exchange Commission (CVM). Access via Co-location In trading via co-location, customer orders are generated through a software application (Automated Trading System ATS) installed on servers that are hosted in the BM&FBOVESPA data center (DC). For the purposes of monitoring, parameter configuration, maintenance etc., the equipment hosted in the Exchange may be remotely accessed by the participant on whose behalf the trading orders are transmitted. Information about access and trading via co-location is provided below. 1. Access via BM&FBOVESPA Co-location The brokerage houses and the customers with trading authorization that contract with the Exchange this access model will be allowed to use the access via BM&FBOVESPA Co-location. Access via BM&FBOVESPA Co-location includes: (i) The renting of a physical space in a restricted and controlled location, equipped with a specific infrastructure including the provision of electrical energy, refrigeration and security devices, where the participant can install equipment geared towards electronic trading, and directly connected to the Exchange s infrastructure;

2 028/2009-DP.2. (ii) The provision of an area for technical maintenance and equipment configuration (staging area); and (iii) The technical support of the Exchange s IT team for the installation of equipment and the operationalization of activities (smart hands). The physical space mentioned in (i), called the co-location area, is provided and maintained by the Exchange in its data center, which is physically segregated from the other DC structures. This space houses the standard hosting units (racks), which consist of physical structures for the conditioning and installation of the participant s trading equipment (servers, switches and other equipment). The hosting unit is only accessible to the representatives appointed by the participant that contracted the access and to the Exchange technicians. The participants are solely responsible for the acquisition, licensing, installation, maintenance, update and management of the trading equipment installed in the hosting units they have contracted. The staging area consists of a physical space segregated from the co-location area, which is available for use by participants, or by their authorized representatives, for the preparation, testing, storage and maintenance of trading equipment. The infrastructure characteristics of the co-location area and the technical specifications of the standard hosting unit are described in Annex I of this Circular Letter. Access to the Co-location and Staging Areas To access the co-location and staging areas, the participant must schedule a visit, in advance, with the Production and Co-location Management area by submitting, through its brokerage house, the form Access Request to the Co-location Center. All visits to the co-location area must be scheduled as follows: Technical visits for the solution of incidents: at any time (24x7), except during infrastructure maintenance periods reserved by the Exchange; and Visits for physical movement of equipment: Saturdays, Sundays and holidays, from 7:00 a.m. to 10:00 p.m. The visits to the co-location area will be accompanied by BM&FBOVESPA technicians during the entire period that the visitor is inside the area. It is prohibited to enter the co-location area with cellular phones, video cameras, still cameras, external storage devices or any electronic equipment that could interfere with the operation of the equipment installed therein. All physical movement of equipment must be exclusively executed by the BM&FBOVESPA technicians.

3 028/2009-DP.3. The access request form may be obtained from the Exchange Website in the following documentation kits: Accesso à Negociação Eletrônica ( / Mercados BM&F / Participantes / Documentação Cadastral / Clearing de Derivativos) and Roteamento de Ordens ( / Mercados BOVESPA / Corretoras / Cadastro). Security The co-location area is provided with: Physical access controlled by a biometric system and permanently accompanied by Exchange technicians; Monitoring by a continuous video recording system and retention of recordings for a period of 7 days; Equipment identification system that assures privacy and anonymity for all participants; and Staging and co-location areas which are isolated from each other and from the other Exchange facilities. Technical Support from Smart Hands The technical smart hands support encompasses activities related to the operationalization of the access via co-location. The support activities will be executed upon demand by the contracting parties (or by their previously authorized representatives, duly appointed before the Exchange) as well as by the Exchange s qualified technical team, as specified in Annex I. The request for technical support from smart hands must be submitted to the Production and Colocation Management area by (colocation@bmfbovespa.com.br) or telephone ( ). Remote Access to the Equipment Installed in the Co-location Area The equipment installed in the hosting unit can be remotely accessed only for configuration of trading parameters and administration of servers. The following remote access connectivity options have been authorized: (i) IP MPLS Network Providers certified for this service: Primesys and CMA (local coverage) and Global Crossing (international coverage). (ii) Metro Ethernet and Ethernet over SDH Network Providers certified for this service: Embratel/Telmex, Primesys, OI, ALGAR, Telefônica de São Paulo, Eletropaulo Telecom and Global Crossing. (iii) VPN Internet To use this connectivity option, the Exchange requires one VPN (VPN LAN-to-LAN) per customer. The Exchange may establish a limit per VPN (per customer) for bandwidth use. Security will be established via an IPSEC cryptographic tunnel by means of a customer IP address and shared security key.

4 028/2009-DP.4. It should be noted that: Each connectivity option may have different levels of availability and response time; The Exchange will neither guarantee the availability nor the response time of any connectivity option; Each participant is responsible for contracting the remote access, from the participant s facilities to the Exchange s facilities, through the telecommunication provider of their choice; The technical information required for the connection establishment and for the security authorization must be provided by the Exchange and by the participant when the connectivity option is selected and the telecommunication provider is contracted; Both the participant and the telecommunication provider are responsible for monitoring the connection; It is prohibited to transmit market data, trade-related messages and drop copies through these connections; and All the connections will be subject to monitoring by the Exchange. Market Data The users of the Access via BM&FBOVESPA Co-location will receive market data for the contracted market segments (BM&F and/or BOVESPA) at no additional cost and for the exclusive use in trading via co-location. The reception of market data from other exchanges or markets will be permitted provided it is contracted by the participant with vendors authorized by the Exchange and distributed by the equipment hosted in the BM&FBOVESPA DC. Certification of the Trading Software Only software certified by BM&FBOVESPA will be permitted for use in trading via co-location in accordance with the rules set forth in Annex I. Without prejudice to the certification, the brokerage houses and the investors are exclusively responsible, before the Exchange and any third parties, for the selection and use of trading software. Contingency The contingency structure for trading via co-location must be provided by the participants themselves, in accordance with their criteria and needs. 2. Contracting Access via BM&FBOVESPA Co-location Contracting Modalities Access via BM&FBOVESPA co-location will be offered in two contracting modalities Brokerage House Co-location and Investor Co-location, as follows: Brokerage House Co-location In this modality, the brokerage houses will contract the access and will have exclusive access to the hosting unit and trading equipment installed there to perform user/administration/management/control functions. The brokerage houses may install software in their servers to send orders on behalf of their own accounts or on behalf of their

5 028/2009-DP.5. customer accounts. These customers may, at the brokerage house s discretion, remotely access the trading software. The connectivity sessions established for trading via co-location must be used solely for this purpose. If these sessions are shared by various customers, they must be distributed among those customers at the discretion of the brokerage house. Investor Co-location In this modality, the investors and their brokerage houses will contract the access and only the investors will have exclusive access to the hosting unit and trading equipment installed there to perform user/administration/management/control functions. The customers may install software in their servers to transmit orders exclusively on behalf of their own accounts. This modality allows the investor to trade through several brokerage houses by using the same trading equipment. In this case, the investor must establish at least one connectivity session for each selected brokerage house, and each session must be used solely for trading. It should be noted that, regardless of the contracted modality, hosting units may not be sublet. Adhesion Term To contract access via co-location, the participants brokerage houses and customers must sign the Adhesion Term to Direct Access via BM&FBOVESPA Co-location, which is attached in the Annex to this Circular Letter, and send it to the Support and Services Management area. When the Investor Co-location modality is selected, each brokerage house through which the investor intends to send orders via co-location must sign an Adhesion Term to Direct Access via the BM&FBOVESPA Co-location Investor Modality. Commercial Terms The costs for Access via Co-location will be calculated based on the market segments that are accessible for trading via co-location and on the quantity of contracted hosting units. Costs of Access via BM&FBOVESPA Co-location Segment Cost per ½ rack Cost per whole rack Power capacity: 2.0 kva Power capacity: 4.0 kva BM&F BRL10,000.00/month BRL15,000.00/month BOVESPA BRL10,000.00/month BRL15,000.00/month Both BRL15,000.00/month BRL25,000.00/month To prevent the contracted hosting units from being idle, the Exchange reserves the right to charge a minimum Exchange fee to the participants that underutilize the contracted access. The Exchange may alter this commercial policy at its own discretion.

6 028/2009-DP Pre-trading Risk Control The brokerage house that authorizes trading via co-location must adopt pre-trading risk management controls so that all the orders sent to the GTS and to the Mega Bolsa via this access model are submitted to such controls. In the Investor Co-location modality, the GTSLiNe and MegaLiNe limit tools that have been developed and offered by BM&FBOVESPA to the brokerage houses must be utilized for trading through the GTS and Mega Bolsa, respectively. In the Brokerage House Co-location, the brokerage houses may utilize a pre-trading risk control tool of their choice, provided that it has a similar function as that of the GTSLiNe and/or MegaLiNe, thereby allowing them to establish at least the following parameters for each customer or master account (when applicable): The maximum risks for bids and offers per instrument; The maximum risks for long and short positions per instrument; and The maximum risks for long and short positions per instrument group. The utilization of a tool other than the GTSLiNe or the MegaLiNe will require a meeting to be scheduled with the BM&FBOVESPA Audit Office prior to the start of trading via co-location. 4. Brokerage House Responsibilities The brokerage house that authorizes trading via co-location will be responsible for: (i) (ii) All the orders transmitted by the customer, which is acting as user of the access via colocation, to the Exchange s electronic trading systems; All the connectivity sessions established for such trading; (iii) Providing customers with authorization for trading via co-location; (iv) Suspending a customer s authorization for trading via co-location; (v) In the case of a suspension, promptly informing the BM&FBOVESPA Control Center (CCB), immediately adjusting their pre-trading risk controls in order to block the transmission of orders from the suspended customer, and requesting that the CCB suspend the connectivity session used by such customer, whenever possible; (vi) Complying with the requirement of utilizing a pre-trading risk control tool, as defined in the previous section; and (vii) Supervising and monitoring the order flow and the trades executed via co-location. To make this possible, the brokerage house systems must be properly prepared for the reception of information related to the orders transmitted from the servers installed in the hosting units, including the possibility of cancellation and alteration of such orders. It should be noted that order cancelations can be executed by submitting a cancellation request to the CCB.

7 028/2009-DP.7. The termination of the contractual arrangement between a customer and the brokerage house that is responsible for the access of such customer to trading via co-location will result in the suspension of that access, in accordance with the same procedures applicable to any suspension case. 5. Area Available for Provision of Access via Co-location BM&FBOVESPA has reserved a large space in its DC for providing access via co-location to meet all the current and future demand from market participants. Should the quantity of hosting units reserved for co-location be insufficient to meet that demand, the Exchange will inform the timeframe necessary for the installation of additional units in the co-location area in order to expand the offer and meet the demand. 6. Other Provisions Trading in the BM&F segment via co-location shall observe the provisions set forth in Circular Letters 021/2008-DP, of July 8, 2008 and 033/2008-DP, of August 20, 2008, and trading in the CME Group markets via the GTS-to-Globex order routing system shall observe the provisions set forth in Circular Letters 045/2008-DP, 090/2008-DP and 008/2009-DP, of September 4, 2008, December 5, 2008 and February 9, 2009 respectively. A participant whose access is suspended shall be prohibited from using the trading equipment for any purposes. In this situation, such participant shall arrange for the removal of the equipment, as defined in the Adhesion Term to Direct Access via BM&FBOVESPA Co-location. Finally, it should be noted that trading via co-location will not alter any of the responsibilities attributed to the BM&FBOVESPA brokerage houses, clearing members and clearing agents in relation to the compliance with the current rules and regulations, as well as, in a general manner, to the control of their customer activities. Further information may be obtained from the Production and Co-location Management area, by (colocation@bmfbovespa.com.br) or by telephone ( ), or from the BM&FBOVESPA Control Center, by (centrodecontrole@bmf.com.br) or by telephone ( ). Edemir Pinto Chief Executive Officer Cícero Augusto Vieira Neto Chief Operating Officer

8 028/2009-DP.8. Annex I to Circular Letter 028/2009-DP INFORMATION AND TECHNICAL REQUIREMENTS RELATED TO ACCESS VIA BM&FBOVESPA CO-LOCATION This document contains the technical and infrastructure characteristics related to Access via BM&FBOVESPA Co-location. The provision of additional characteristics and technical resources, which are requested by the participant but are not included in this Circular Letter, will be analyzed on a case-by-case basis. 1. Infrastructure Power The co-location area is supported by dual no-breaks and by a system of generator groups, and provides continuous supply of electricity with a 208 V voltage. Refrigeration The co-location area provides a humidity control system and a dual refrigeration system with continuous supply of air conditioning. Fire prevention The co-location space provides a VESDA (Very Early Smoke Detection Apparatus) smoke detection system and a FE 25/ECARO 25 fire extinction system (extinction via FE 25 gas). 2. Hosting Unit (Rack) The offered standard hosting unit is the half (½) rack. The half rack consists of half a 40-Us rack, composed by 2 modules of 20 Us each, with independent access. The hosting unit is composed by the following resources and characteristics: Dimensions: Height: 35 (889 mm) Width: (800 mm) Support width (rails): 19 (482.6 mm) Depth: (1,100 mm) Maximum electrical power of 2.0 kva (1.8 kw), with an equivalent amount of heat dissipation; Dual electrical circuit; A telephone extension and phone provided by the Exchange, upon request; An electrical socket destined to and identified for maintenance needs, independently from the electrical network for the servers; Energy consumption meter; Frontal and rear locking system; Four network points per segment (BM&F and BOVESPA), of which two are destined to the administration and parameterization of the trading software and two are destined to the connection to the Exchange gateways; and

9 028/2009-DP.9. Three cross connections. It should be noted that the Exchange may analyze requests for differentiated contracting modalities. 3. Trading equipment The trading equipment provided by the participant must be installed in quantities that are compatible with the hosting unit s technical specifications and must include at least: A 3-layer switch to connect the servers installed in the hosting unit to the Exchange infrastructure, with a high-availability configuration; and A server with basic software and applications. Observations: The maximum quantity of 30 IP addresses per hosting unit will be permitted; and It is prohibited to utilize equipment that was not manufactured for installation in a 19 rack. 4. Certification of Trading Software Only software certified by BM&FBOVESPA in accordance with its functionality tests will be allowed to be utilized in trading via co-location. In the case of a material alteration to the software or at the Exchange s discretion, the certification renewal may be requested. The software may be monitored through the verification of its version: M. m. R. B where: M = a material alteration to the software version (requires new certification); m = a small alteration, with the addition of a functionality to the software (does not require new certification); R = alteration of release new version, with small enhancements and corrections (does not require new certification); and B = a new generation of the software, not necessarily with alterations (does not require new certification). The certification renewal may also be required in the event the Exchange makes alterations to its FIX specification that require alterations to the solutions utilized by the participants. The certification must be requested to the Production and Co-location Management area, by telephone at (+55-11) Staging area In the staging area, customers will be provided with Internet access and a telephone for local and international calls, which will be aimed at concluding the preparation of the trading equipment and the configuration of the software necessary for trading via co-location. 6. Technical support from Smart Hands

10 028/2009-DP.10. To operationalize access via co-location, BM&FBOVESPA will execute the technical support activities described below. IT logistics and Staging Reception and devolution of equipment sent to the Exchange by the customer; Customer orientation in issues related to the installation, de-installation and movement of equipment; Set up of equipment in a rack at the staging area; Accompanying customers and equipment manufacturers/suppliers during the environment set up; Energization of equipment in the staging area; Connection with network points (UTP, coaxial and fiber); Transportation of equipment for activation in the co-location area; and Authorization of physical access to the co-location and staging areas. Co-location area Visual verification of machines and physical verification of cables to assist in the diagnosis and repair of failures; Cabling - Interconnection of internal equipment to the rack and cross connection; - Interconnection of the rack to the POP (point of presence) and the DC; and - Connection of cables (UTP, coaxial and fiber). Energization and movement of equipment in the rack; Equipment inventory; Filming and camera adjustment; Turn on/off equipment, upon request by the customer; and Deactivation of trading equipment.