B3S NEW FEE POLICY 1 1 1 PUBLIC INFORMATION Interest Rate - PowerPoint PPT Presentation

B3’S NEW FEE POLICY 1 1 1 PUBLIC INFORMATION

Interest Rate Investments Individual investors by investment type Accumulated net inflows by fund class (in thousands)² (in billions of Brazilian Reals)¹ 2.500 2.192 200 2.017 2.000 161 150 1.417 1.500 1.375 112 100 78 1.000 50 51 500 - 0 (50) 2016 2017 2018 Sep-19 2016 2017 2018 Sep-19 Depositary Equity Fixed Income Equity Multimarkets FIDC Multimarket FII Accounts B3 Funds ¹ Source: Anbima. ² Source: Anbima e B3 2 2 PUBLIC INFORMATION PUBLIC INFORMATION

B3’s New Fee Policy Principles Estimated impact: $250 BOOST THE EQUALIZE EXPAND TRADING GROWTH OF B3’S VOLUME AND FEE million/year INDIVIDUAL INCREASE MARKET PRACTICES INVESTORS BASE LIQUIDITY reduction in fees charged on the market 3 PUBLIC INFORMATION

Highlights of B3’s new fee policy Elimination of fixed maintenance fee per Deeper discounts Automatic fee account of around and more accessible reduction as each R$110.00 per year and benefits, plus special investor volume exemption from incentives, for large increases custody fee for investors day traders with outstanding positions below R$20,000.00 Billing by processing Equalization of fees Boost securities financial earnings among different types with exemption for lending transactions of investors (local retail investors with and increase the institutional, non- transparency of these outstanding resident, individual transactions positions below investors, etc.) R$20,000.00 4 PUBLIC INFORMATION

EXPAND TRADING VOLUME AND INCREASE MARKET LIQUIDITY 5 PUBLIC INFORMATION

LOCAL INSTITUTIONAL INVESTORS HOW IT IS HOW IT WILL BE TRADING* Discounts limited to day trade Discounts now given to non-day transactions. trade transactions. Non-day trade discount Fee structure based on the based on the total volume volume traded by customer in traded by the market and all brokerage houses; the volume low impact potential. can be aggregated under a master account. 0.03% applied to all investor 0.0325% over the traded types. Progressive discount from volume. R$100,000.00 per trading day 0.025% over the traded and may reach up to 0.0125% volume per local funds. over the traded value. * Only B3’s fees considered. Does not include brokerage house fees. 6 PUBLIC INFORMATION

LOCAL INSTITUTIONAL INVESTORS HOW IT IS HOW IT WILL BE TRADING* Account maintenance Up to R$9.28/month Zero for residents. R$115.83/month for non-residents. Custody fee Progressive fee discount ranging Fee waived for investments up to from 0.0130% to 0.0005% per R$20,000.00. year over the value in custody. From R$20,000.01 to R$300,000.00 – 0.05% to 0.02% per year over value in Fee waived for investments up custody. to R$300,000.00 and for non- Above R$300,000.01 – 0.0130% to resident investors. 0.0005% per year over value in custody. * Only B3’s fees considered. Does not include brokerage house fees . 7 PUBLIC INFORMATION

NEW INCENTIVE PROGRAM LARGE DAY Admission requirements and registration • TRADERS approved by B3. Fee from 1.6 bps up to 0.5 bps over the • volume traded. 8 PUBLIC INFORMATION

HOW IT IS HOW IT WILL BE SECURITIES LENDING* Percentage over the security’s lending fee Fixed fee of 0.25% per with incentive to transparency: year regardless of the Screen trading: 20% • security’s lending cost. OTC trading: 30% • Definition of floor and cap fee with incentive to transparency: Minimum fee of R$10.00 Screen trading: minimum fee • per lending transaction. of 0.025% per year with 1% cap per year • OTC trading: 0.05% fee per year over the • security’s lending value with 1.5% cap per year * Only B3’s fees considered. Does not include brokerage house fees. 9 PUBLIC INFORMATION

EQUALIZE FEE PRACTICES 10 PUBLIC INFORMATION

Equalization of trading fees and depository fees • EQUALIZE FEE among different types of investors PRACTICES Billing by processing financial earnings, following a • model widely used by international depositories 11 PUBLIC INFORMATION

BOOST THE GROWTH OF B3’S INDIVIDUAL INVESTORS BASE 12 PUBLIC INFORMATION

INDIVIDUAL INVESTORS HOW IT IS HOW IT WILL BE DEPOSITORY* Account Maintenance Zero Up to R$9.28/month Custody fee Fee waived for investments up to Progressive table ranging from 0.0130% to 0.0005% R$20,000.00. per year over the value in From R$20,000.01 to R$300,000.00 – 0.05% to custody. Fee waived for 0.02% per year over the value in custody. investments up to Above R$300,000.01 – 0.0130% to R$300,000.00. 0.0005% per year over the value in custody . * Only B3’s fees considered. Does not include brokerage house fees. 13 PUBLIC INFORMATION

INDIVIDUAL INVESTORS HOW IT IS HOW IT WILL BE TRADING* Non-day trade 0.03% over traded value. 0.0325% over traded value. Additional reductions from Reduction based on total market R$100,000.00 per day and reduced fee volume. up to 0,0125% over traded value. Day trade 0.025% over traded value. 0.025% over traded value. Additional reduction for individual Additional reduction for individual investors trading R$100,000.00 per day. investors trading over R$4 m in Table with 11 discount ranges and cash equities and fee table with 5 minimum fee of 0.008% over traded value. discount ranges. * Only B3’s fees considered. Does not include brokerage house fees. 14 PUBLIC INFORMATION

Example 1 CURRENT MODEL NEW MODEL Non-day Trade R$327.600,00 R$276.494,40 Day Trade – – Custody Maintenance Fee R$1.389,96 Waived A pension fund has R$ 1 Value in Custody Fee billion under custody. It trades on average R$4 Waived R$27.039,60 million per day, non-day trade. At the end of the Earnings Processing Fee year, dividends were paid at a dividend yield Zero R$36.000,00 of 3%. TOTAL: R$328.989,96 TOTAL: R$339.534,00 15 PUBLIC INFORMATION

Example 2 CURRENT MODEL NEW MODEL Non-day Trade R$812.500,00 R$678.000,00 Day Trade R$312.500,00 R$248.250,00 Custody Maintenance Fee R$1.389,96 Waived For 1 year, a Non- Value in Custody Fee Resident Investment fund traded on average Waived R$27.039,60 R$10 million non-day trade and R$5 million Earnings Processing Fee day trade everyday. It also kept R$1 billion Zero R$36.000,00 under custody. At the end of the year, the TOTAL: R$1.126.389,96 TOTAL: R$989.289,60 dividend yield was 3%. 16 PUBLIC INFORMATION

Example 3 CURRENT MODEL NEW MODEL Non-day Trade – – Day Trade R$96.000,00 R$68.400,00 Custody Maintenance Fee – – Non-Resident Investor Value in Custody Fee registered on the Large Daytraders Program – – trades R$600 million in day trades everyday . Earnings Processing Fee – – TOTAL: R$96.000,00 TOTAL: R$68.400,00 17 PUBLIC INFORMATION

B3’S NEW FEE POLICY 18 18 18 PUBLIC INFORMATION