Annual Report 2005 Companies of Grupo Bolsa Mexicana De Valores (GRUPO BMV)

Grupo BMV Annual Report 2005 Companies of Grupo Bolsa Mexicana de Valores (GRUPO BMV) Securities Market Bolsa Mexicana de Valores, S.A. de C.V. (Mexican Stock Exchange) S.D. Indeval, S.A. de C.V., Institución para el Depósito de Valores (Central Securities Depository) Contraparte Central de Valores de México, S.A. de C.V. (The Central Counterparty) Derivatives Market MexDer, Mercado Mexicano de Derivados, S.A. de C.V. (Futures and Options Exchange) Asigna, Compensación y Liquidación (The Derivatives Market Clearinghouse) Sif Icap, S.A. de C.V. (Broker) Valución Operativa y Referencias de Mercado, S.A. de C.V. (Valmer) (Price Vendor for Financial Instrument Valuation) Other Institutional Activities Bursatec, S.A. de C.V. (Technology and Systems Development) Corporativo Mexicano del Mercado de Valores, S.A. de C.V. (Personnel Services) Sif Icap Servicios, S.A. de C.V. (Personnel Services) s M i s i o n V i s i o n The companies that make up Grupo BMV To modernize and strengthen the are engaged in a variety of activities, companies of Grupo BMV; to keep them and work together in an integrated competitive and help them offer the best and complementary manner. Each is a services and products in their respective fundamental part of the functioning and fields; and to ensure that they are well- development of the securities market in integrated and efficiently manage their Mexico, supporting all its participants- resources, so they can create value and -issuers, brokers and investors--in the build confidence. pursuit of their respective objectives. The strategies we are using to modernize Grupo BMV functions on three fundamental and fortify the group are aimed at: conditions: transparency, efficiency, and solidity. These principles contribute to its • The market. Encouraging a rising central mission while helping to maximize volume of trades in a wider array of the value of the Group. instruments, taking advantage of all the advantages of the opening and globalization of the financial markets, and the convergence of trading with the leading international markets. • The group itself. With advanced technology, certification of critical processes and the articulation of synergies in the operating sphere, and sales and marketing in the strategic sphere. • Our strategic partners. Through alliances that maximize our trading capacity and increase our presence in the fastest growing segments of the industry, both within and outside of Mexico. • The general public. To shore up public trust and the reputation of our securities market institutions through a more effective relationship with the media and closer ties with universities and sources of analysis. Bolsa Mexicana de Valores Mission and Vision Message from the Chief Executive Officer Board of Directors Comittees The Securities Market in 2005 Primary Activities in 2005 Vision for 2006 Shareholders & Members S.D. Indeval Corporate Officers Facts & Figures Mission Message from the Chief Executive Officer Board of Directors Committees Data Highlights Primary Activities in 2005 Vision for 2006 CCV Financial Information Shareholders Mission Corporate Officers Message from the Chief Executive Officer S.D. Indeval Facts and Figures Board of Directors Comittees Facts & Figures Primary Activities in 2005 Vision for 2006 Financial Information MexDer Shareholders Corporate Officers Mission and Vision Message from the Chief Executive Officer Board of Directors Committees Primary Activities in 2005 Market Facts and Figures Vision for 2006 Shareholders/Members Asigna MexDer Participants Corporate Officers Mission and Vision Message from the Chairman of the Technical Comittees Message from the Chief Executive Officer Technical Comittee Subcomittees Primary Activities in 2005 Vision for 2006 Trustors Sif Icap Corporate Officers Mission and Vision Message from the Chief Executive Officer Board of Directors Committees Primary Activities in 2005 Vision for 2006 Shareholders Valmer Corporate Officers Mission and Vision Message from the Chief Executive Officer Board of Directors Comittees Primary Activities in 2005 Vision for 2006 Shareholders Corporate Officers Message from the Chairman of the Board of Grupo BMV To speak of Grupo BMV is to refer proudly to a group of Now more than ever before, Grupo companies that specializes in services to the Mexican BMV is investing heavily in information financial system, functionally integrated and committed to their technology, aware that this is a shareholders, board members, securities issuers, investors, crucial area for the future and proper clients, authorities, personnel, and society at large. functioning of the securities market. It is also redefining mechanisms and Their activities follow the institutional strategic guidelines procedures that will need ongoing approved by their respective Boards of Directors, and attention, including regular planning and under conditions of security, transparency, innovation and tracking of international trends, in order competitiveness. to continue innovating and remaining globally competitive. In this context, in 2005 the member companies of Grupo BMV focused on three basic objectives: Here I would like to highlight some of the technological measures adopted • Reviewing and strengthening their technological by the Mexican Stock Exchange and infrastructure: equipment, systems, telecommunications, S.D. Indeval. First, there is a program developments, backups, and contingency plans. to expand the capacities of the trading systems, which is now well under way, • Offering quality services with high standards of efficiency, along with the creation of an exclusive to meet the needs and requirements of users. service to transmit order routing information in the Equity Market, called • Developing new products and services with added value, SETRIB Plus, and the renovation of to complement the existing range and to take advantage of the Tandem equipment. These three institutional synergies. projects which will allow brokerage firms and their clients to conduct more trading The results of these efforts were highly satisfactory, though by using algorithms, a process known there are always new challenges ahead. as program trading. The companies in the group invested heavily in their To address some earlier problems, the technological infrastructure, particularly the Mexican Stock central securities depository defined a Exchange (Bolsa Mexicana de Valores, S.A. de C.V.); S.D. strategy last year based on a complete Indeval, S.A. de C.V., Institución para el Depósito de Valores diagnosis and review of their operations, (S.D. Indeval); MexDer, Mercado Mexicano de Derivados, which involved strengthening the current S.A. de C.V. (MexDer); SIF ICAP, S.A. de C.V.; and Valuación system and developing a new one, all Operativa y Referencias de Mercado, S.A. de C.V. (Valmer), of the modules of which are expected who worked to upgrade their equipment and expand trading to be completed by 2008. The priority capacities. With the support of Bursatec, S.A. de C.V., the is to guarantee, in close coordination companies of the group are also updating their central systems with Banco de Mexico, the efficient and their contingency plans, to ensure the efficiency and functioning of the payment systems in continuity of the services they provide, and to reduce trading which S.D. Indeval participates. and systematic risk. 4 To date, 95% of the functional risks derivatives exchange, and two other financial institutions were identified have been resolved. The admitted as Trading Members. computer system now uses up only a third of the resources that it did in the These events are a sign of the corporate and financial strength preceding year, and closing time delays of Grupo BMV, as are the solid financial results reported this have diminished considerably. year by its companies. MexDer continues to work on its API/FIX Another of the year’s major events was the acquisition of the project, which will allow it to compete building that houses the Securities Center in Mexico City, efficiently outside of Mexican borders, which is the headquarters of Grupo BMV. The Mexican Stock through a standard interconnection Exchange purchased this property in an open and above-board protocol known as FIX (Financial process and on the best terms for all parties involved, without Information Exchange). The use of compromising its financial health in any way. FIX protocol means more institutions can participate in the local derivatives The former owner of the building, a company called Cebur, market, because it will allow Members S.A. de C.V. (now in the process of liquidation), partly owned to trade from abroad. The project is by most of Mexico’s brokerage firms and some banks, had expected to be ready early in 2006. decided some years ago to sell the building, but had not received any acceptable offers in that time. In 2005, the Board Another highlight of the year was the of Directors of the Mexican Stock Exchange authorized its incorporation of new shareholders and purchase under optimum market conditions. Simultaneously participants to the companies of Grupo with the BMV’s purchase, the Mexican Securities Industry BMV. Protego Casa de Bolsa, S.A. Association (AMIB) bought the first floor of the building from de C.V., joined the BMV as a Limited Cebur, and S.D. Indeval already owned two floors of it. Member (fixed-income only), while Casa de Bolsa Credit Suisse (Mexico), In reading through the attached reports for each company in S.A. de C.V., changed its status from Grupo BMV, you will find an account of all the activities carried Limited to Full Member, and can now out during the past year, too detailed to be included in these engage in brokerage in both the equity pages. However, I cannot help but mention, because of its and fixed-income markets. transcendence for this country, that after a long process of work and negotiation, a new Securities Market Act was passed In its second year of operations, by Congress at the end of last year, and will take effect in mid- Contraparte Central de Valores de 2006.

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