Financial Statements 2019

FINANCIAL STATEMENTS 2019

MANAGEMENT REPORT - 2019

Dear Shareholders, B3 S.A. - Brasil, Bolsa, Balcão (“B3” or “Company”) hereby submits for your appreciation the Management Report regarding the activities performed in 2019. HIGHLIGHTS OF THE YEAR 2019 consolidated a new era for the financial and capital markets in Brazil. Driven by historically low interest rates and supported by B3's infrastructure, our customers were able to substantially increase their business opportunities, creating operational records in both the listed and over-the-counter markets. The average daily traded volume in the cash equities market totaled R$16.7 billion (against R$11.9 billion in 2018) and the average daily volume on the listed derivatives market was 3.9 million contracts (against 3.0 million in 2018). The new level reached by the Brazilian capital markets is also demonstrated by the almost R$90 billion raised through 42 public equity offerings during the year and by the more than 70% growth in the average number of accounts in the cash equities depository, mainly in retail accounts. To enable this market expansion with the level of excellence expected by its clients, B3 intensified its initiatives on three strategic pillars: i) operational excellence, ii) services and product development, and iii) pricing and tariff model, always focusing on the client, and maintaining the commitment to its responsibility before the regulatory bodies and society, as a financial market infrastructure. The availability of the platforms, a key metric for assessing B3's operational integrity and strength, registered 99.96% in 2019, as a result of the Company's continuing investments in cutting-edge technology that guarantees increased capacity and performance gains, as well as of the efficiency produced by the consolidation of its data centers. The Company also structured an operational customer service department, with roughly 200 employees dedicated to improving user experience in daily routines with the services provided by B3. With more agile processes for product development, B3 has delivered more than 40 new products and services in the listed and over-the-counter markets since August 2018 and expects to deliver further 40 in 2020. Making more products and services available to clients has been possible because B3’s structure involves carrying out multiple projects at the same time and coordination with the regulatory bodies, service providers and, most of all, clients, who take part in the main steps of developing a product - from mapping demands to launching prioritization. B3's alignment with its clients and its mission to promote the Brazilian financial and capital markets also resulted in adjustments to fees and incentives during 2019. At the beginning of the year, the Company reinforced its incentive policies for individuals in the cash equities depository and Treasury Direct, with positive results in attracting new investors and in the amount invested in these assets. More recently, B3 released new policies on fees for the equities and over-the-counter markets, to be implemented in 2020, in which it addressed specific demands for the various classes of clients, aiming to maintain B3's commitment to share the benefits from economy of scale and operational leverage with the market. B3 has executed its strategic plan based on: i) strengthening its core businesses, ii) expanding the range of products and services directly associated with its main markets (listed, over-the-counter and financing), and iii) seeking selective diversification opportunities in areas that are adjacent to its traditional businesses, in every case focusing to increasing satisfaction and value creation for its customers. In line with this plan, the Company made two acquisitions in 2019 (BLK and Portal de Documentos) which, despite providing only a marginal financial contribution in the short term, increase and diversify the offer of products to B3's customers. In this context, the Company's revenue totaled R$6.6 billion in 2019, up by 22.9% against 2018, with recurring net income of R$3.2 billion, up by 22.9% year-on-year. With an environment guided by stability of interest rates at levels considerably below historic levels, B3 believes that the Brazilian market, despite its recent evolution, still has a significant growth potential. On the demand side, the sophistication and diversification of investors' portfolios in search of profitability creates demand for new products, in addition to boosting the interest for existing assets. On the supply side, Brazilian companies are increasingly turning to the domestic capital markets as a source of long-term financing. Given this scenario, B3 is continuing to focus its efforts on the needs of the market, whether operational or related to the development of solutions and products, always seeking to be the chosen platform by its clients to conduct their business.

MANAGEMENT REPORT - 2019

OPERATIONAL PERFORMANCE

As previously reported to the market, since the first quarter of 2019, the Company adopted a new breakdown of its revenues in different markets and services. The reconciliation of these changes and of the historical bases are available on the Investor Relations website. All comparisons in this document are in relation to the year 2018, unless otherwise stated.

Listed Equities 2019/2018 2019 2018 (%) ADTV (R$ million) 16,738.7 11,878.9 40.9% Cash Market Margin (bps) 4.335 4.650 -0.315 bps Average Market capitalization (R$ billion) 4,060.8 3,358.2 20.9% Turnover velocity Annualized (%) 102.2% 86.7% 1,556 bps Options market ADTV (R$ million) 338.9 298.9 13.4% (stocks/Indices) Margin (bps) 14.139 14.304 -0.165 bps ADTV (R$ million) 184.9 131.1 41.0% Foward market Margin (bps) 12.968 13.000 -0.032 bps ADV (thousands of contracts) 1,474.7 696.0 111.9% Future stock indices Average RPC (R$) 1.004 0.871 15.2% Investors number Average (thousand) 1,256.2 731.2 71.8% Securities lending Average open positions (R$ billion) 59.3 45.8 29.3%

Note: ADTV stands for Average Daily Traded Value); ADV stands for Average Daily Volume; RPC stands for Revenue per Contract; and bps stands for basis point.

The highlights in the equities segment were the growth of 40.9% in the ADTV on the cash equities market and of 111.9% in the volumes of stock indices futures contracts. In the cash equities market, this increase reflects both the 20.9% growth in average market capitalization1 as well as the higher turnover velocity2, which rose to 102.2% in 2019. In the futures contracts market, the positive performance can be attributed to the growth in trading of Mini contracts, particularly by individual investors and by High Frequency Traders (HFT).

The trading/post-trading margin in cash equities was 4.335 bps. The 0.315 bps decrease is mostly explained by (i) the marginal discounts given to the market in accordance with B3's pricing policy3 for 2019 and (ii) the greater participation of domestic institutional investors, who have lower fees. The average RPC of the stock indices futures contracts increased by 15.2%, mainly on account of B3’s new form to charge for the mini version of these contracts from Mar'19 onward. The 71.8% growth in the number of active investors in the equities depository once again provides evidence of the increased interest in diversifying investments in a lower interest rate scenario. By means of its incentive programs, B3 continues to support brokerage firms that have focused on attracting new clients to the equities market.

1 Market capitalization is obtained by multiplying the number of shares issued by the listed companies by their respective market prices. 2 Turnover velocity is obtained by dividing the volume traded on the cash equities market during the period, by the average market capitalization in the year. 3 According to the table of fees in force, marginal discounts are granted to the entire market whenever the month's average daily trading exceeds the levels of R$9 billion, R$11 billion and R$13 billion.

MANAGEMENT REPORT - 2019

FICC¹ 2019/2018 2019 2018 (%)

Interest rates in BRL ADV (thousand of contracts) 2,811.7 1,949.5 44.2% Average RPC (R$) 0.876 1.072 -18.3% ADV (thousand of contracts) 349.4 338.1 3.4% Interest rates in USD Average RPC (R$) 1.742 1.697 2.7% ADV (thousand of contracts) 750.4 690.1 8.7% FX rates Average RPC (R$) 3.877 3.355 15.6% ADV (thousand of contracts) 9.3 8.9 4.2% Commodities Average RPC (R$) 2.241 1.980 13.2% Total ADV (thousand of contracts) 3,920.8 2,986.6 31.3% Total Average RPC (R$) 1.531 1.673 -8.5%

In 2019, the average daily volume traded totaled 3.9 million contracts, an increase of 31.3%, as a result of the growth in the volumes traded in all contracts, with highlight going to Interest rates in BRL contracts, which was driven by the successive interest rate cuts implemented in Brazil. The average RPC dropped 8.5%, mainly due to the growth of Interest rate in BLR options contracts, which carry a lower RPC. This decrease was partially offset by the 8.3% appreciation of the US$ against the R$ during the period, which had a positive impact on the RPC of FX rate, Interest rate in USD and Commodities contracts as well as B3’s new way of charging the FX mini contracts since Mar'19.

OTC

Fixed income instruments 2019/2018 2019 2018 (%) New issues Bank funding (total in R$billion) 9,197.9 8,214.7 12.0% Bank funding (average in R$billion) 1,220.0 1,097.5 11.2% Stock Corporate debt (average in R$billion) 625.1 674.3 -7.3% Number os investors (average in thousand) 1,057.6 652.8 62.0% Treasury Direct Stock (average in R$billion) 63.6 50.8 25.2%

The volume of new issues and the outstanding positions of bank funding instruments recorded in the year increased by 12.0% and 11.2%, respectively, mainly due to the growth in issues of Bank Deposit Certificates and Interbank Deposit Certificates, which accounted for 60.4% and 35.9% of new issues, respectively, during 2019. In the opposite direction, even taking into account the increase in corporate debt issues in the capital markets, the average outstanding position of corporate debt instruments decreased by 7.3% as a consequence of the significant amount of redemption of debentures issued by leasing companies, as a result of regulatory changes4. Debentures issued by leasing companies represented 34.0% of the average corporate debt outstanding position in 2019 (against 53.2% in 2018).

Another highlight of the fixed income market was the sharp growth in Treasury Direct, which registered a 62.0% increase in number of investors, while the outstanding position rose by 25.2%. B3 offers an incentive program for brokerage firms to expand their number of investors and outstanding positions of this product. The program, as from 2020, is going to be revised annually, and the targets set for 2020 were adjusted considering the results obtained in 2019. This incentive program is yet another example of the way in which the Company supports its clients in developing the Brazilian market.

4In Oct/16, the Central Bank issued a resolution prohibiting the execution, extension and renewal of repo transactions involving securities issued by companies linked to the same financial conglomerate, including debentures of its leasing companies.

MANAGEMENT REPORT - 2019

Derivatives 2019/2018 2019 2018 (%) New issues (total in R$billion) 10,734.9 9,240.0 16.2% Stock (average in R$billion) 2,620.8 2,331.9 12.4%

The registration of new issues in the OTC derivatives market and structured transactions market showed a growth of 16.2%, which was largely concentrated in FX swap and forward contracts. The average volume of outstanding positions increased by 12.4%. Financing infrastructure 2019/2018 2019 2018 (%) Number of vehicles sold (thousand) 18,586.9 17,814.5 4.3% SNG Number of vehicles financed (thousand) 6,113.7 5,486.4 11.4% % Vehicles financed / vehicles sold 32.9% 30.8% 210 bps Contracts added (thousand) 3,617.9 3,440.6 5.2% Contracts Systems % Contracts added / vehicles financed 59.2% 62.7% -353 bps

In 2019, the number of additions in the National Liens System (SNG) posted an 11.4% growth, which can explained by the 4.3% increase in the total number of vehicles sold added to the higher credit penetration, which totaled 32.9% in 2019. In the Contracts System, the number of transactions was 5.2% higher in 2019, reflecting the growth in the number of vehicles financed, which was partially offset by the reduction in B3's market share, which was 59.2%. In the analysis of market share, we can observe the negative effect of the interruption of B3's service in the state of Paraná as from October'18, and of the change in the business model in certain states during the second half of 2019 (additional explanations can be found in the Revenue analysis). These effects were partially offset by the return of the service in the states of Minas Gerais and Piauí as from May'19. Technology, data and services Technology and access 2019/2018 2019 2018 (%) Monthly Utilization Average number of clients 13,302 12,474 6.6% CIP Processed electronic cash transfers (thousand) 839,526 637,692 31.7%

The average number of clients that pay the monthly utilization fees related to services in the OTC segment posted a 6.6% increase, reflecting the growth of the asset management industry (buyside) in Brazil, and the number of electronic fund transfers (EFTs) processed during the year, which was up 31.7%. INCOME STATEMENT Revenue Total revenue: totaled R$6,576.5 million in 2019, up by 22.9%, with growth in the revenue of all the company's business lines. Listed: R$4,266.4 million (64.9% of the total), an increase of 33.5%. ▪ Cash equities and equity instruments: R$2,752.3 million (41.9% of the total), up by 40.3% in the period. Trading and post-trading: R$2,345.4 million (35.7% of the total), an increase of 42.3%, reflecting the growth of volumes traded in cash equities and in stock indices futures contracts, as well as the higher average RPC of the stock indices futures contracts. Depository: R$141.7 million (2.2% of the total), up by 16.0% in the period. The 71.8% increase in the average number of accounts in the depository was partially offset by the result of the incentive program to expand the individual investor base in the equities market, which totaled R$60.4 million in 20195.

5 The incentive program offers bonuses in the form of partial exemptions from the custody fee for those brokers who achieve performance targets related to growth in the number of accounts and in the deposited balance of this investor group. The results of this program were measured and distributed every six months.

MANAGEMENT REPORT - 2019

Stock lending: R$151.9 million (2.3% of the total), a 30.5% increase, as a result of the 29.3% increase in the average financial volume of outstanding positions. Listing and solutions for issuers: R$113.3 million (1.7% of the total), up by 51.8%, mainly as a result of the higher number of public offerings (5 IPOs and 37 follow-ons), that totaled R$89.3 billion in 2019 against R$10.5 billion in 2018 (3 IPOs and 2 follow-ons). ▪ FICC: R$1,514.0 million (23.0% of the total), an increase of 22.6% due to the increase in the average daily volume traded in all contracts, with highlight going to the 44.2% increase in Interest rates in BRL contracts, and to the appreciation of the US dollar, which had a positive impact on the RPC of FX rate, Interest rate in USD and Commodities contracts. OTC: R$991.0 million (15.1% of the total), a 2.1% increase. ▪ Fixed income instruments: R$634.1 million (9.6% of the total), down 2.2%, mainly due to the impact of the incentive program aimed at Treasury Direct investors introduced at the start of the year6, which was partially offset by the increase in new issues and in outstanding position of bank funding instruments. Considering the positive performance of brokers in attracting new clients and expanding the outstanding position of securities, revenue from Treasury Direct, after deducting incentives, dropped from R$115.5 million in 2018 to R$65.9 million in 2019. These incentives totaled R$88.9 million versus revenues of R$154.8 million in the year. ▪ Derivatives: R$191.9 million (2.9% of the total), an 10.5% increase, as a result of the increase in financial volume and the appreciation of outstanding position, mainly of forward and swaps contracts of FX. ▪ Others: R$165.0 million (2.5% of the total), an increase of 11.3%, reflecting the growth in the outstanding position of registered mutual fund shares. Infrastructure for financing: R$566.4 million (8.6% of the total), a 12.9% growth. This increase is explained (i) by the 11.4% growth in the number of vehicles financed, (ii) by the additional revenue from the services provided by Portal de Documentos, which was acquired in Jun/19, (iii) by the resumption of the service for sending data related to vehicle financing contracts in the states of Minas Gerais and Piauí as from May/19, and (iv) by the annual price adjustment for inflation, which were partially offset by (i) effects of changes in the data availability business model7 and (ii) the interruption of B3's service in the state of Paraná as from Oct/18. Technology, data and services: R$752.8 million (11.4% of the total), up by 10.1%. ▪ Technology and access: R$448.4 million (6.8% of the total), an increase of 8.8%, as a result of the 6.6% increase in the number of clients accessing the OTC segment's platforms, and the 31.7% increase in the number of EFTs processed during the year. ▪ Data and analytics: R$178.2 million (2.7% of the total), an increase of 13.8%, which is mainly due to the appreciation of the US Dollar against the Real, given that 46.9% of this revenue was linked to the US dollar in 2019. ▪ B3 Bank: totaled R$45.9 million (0.7% of the total), a 26.9% increase, as a result of the growth in the volume of transactions carried out by foreign customers who use B3 Bank's custody services and the increase in revenue from Brazilian Depositary Receipts (BDRs). Net revenue: up 22.3%, totaling R$5,907.8 million. Expenses Expenses totaled R$2,678.8 million, up by 10.1%. ▪ Personnel and charges: R$829.2 million, an increase of 10.0%, mainly due (i) to the annual salary adjustment on account of collective bargaining, (ii) the addition of personnel expenses of the companies acquired during the year (BLK and Portal de Documentos) and (iii) the growth in the number of professionals in key areas of the Company. ▪ Data processing: R$199.5 million, an increase of 5.0%, due to (i) intensification of technology projects related to improvements in infrastructure, processes, functionalities and controls of business and corporate platforms and (ii) the inclusion of BLK and Portal de Documentos' technology expenses. ▪ Depreciation and amortization: R$1,030.3 million, an increase of 8.1%, as a result of (i) the adjustment made to the amortization curve of intangible assets recognized in connection with the acquisition of Cetip (R$792.4 million in 2019

6The program offers revenue rebates for those brokers that achieve performance goals related to the growth in the number of investors and in the Treasury Direct balance. 7B3 adopted a new model under which Detran-accredited registration companies can contract access to the B3 platform in order to retrieve data regarding financed vehicle contracts, as previously authorized by the lending institutions. With regard to financial impact, the most significant change is that under this model there is no revenue-linked expense related to the contracting of the registration companies. In addition to reducing B3's expenses, this change has a negative impact on revenues, since under the previous model the cost of the registration companies was included in the price charged by B3.

MANAGEMENT REPORT - 2019

against R$747.4 million in 2018) and (ii) the acceleration of depreciation of fixed assets as a result of the retrofit project at the company's corporate headquarters. ▪ Revenue-linked expenses: R$239.2 million, up by 20.7%, explained by the increase in expenses with the registration companies during 2019, mainly due to the old model adopted in several states, under which B3 recognized the amount related to the services provided by the registration companies as expenses. It is worth mentioning that, starting in 3Q19, B3, together with its clients, implemented a new business model8 in states with a high transaction volume in which Detran- accredited registration companies can contract access to the B3 platform to retrieve data regarding financed vehicle contracts. Under this model, there is no expense linked to the service provided by B3. ▪ Third-party services: totaled R$70.0 million, a 19.2% drop, due to the reduction in expenses with attorneys' fees and strategic consulting firms. ▪ Other: totaled R$227.5 million in the year, up by 30.2%. The most significant item in this group of expenses is that of provisions, which for the most part consist of updates of provisions related to legal disputes for which part of the amount under discussion is updated in accordance with the share price of B3SA38 and which impacted expenses in R$83,8 million impact in the year (against R$20.9 million in 2018). Financial result The financial result was positive by R$106.9 million in 2019. Financial revenues totaled R$552.4 million, an increase of 13.3%, which can mainly be attributed to the increase in the company's average cash position. For their part, financial expenses totaled R$422.6 million, an 7.5% decrease, largely due to the Company's lower level of average indebtedness during the year and the reduction in the cost of the debt, which was partially offset by non-recurring effects of mark-to-market of government bonds. (In thousand of Brazilian Reals, 2019/2018 2019 2018 unless otherwise indicated) (%) Financial result 106,905 (53,682) - Financial income 552,406 487,723 13.3% Financial expenses (422,624) (456,990) -7.5% Net FX variation (22,877) (84,415) -72.9% In addition, it is important to note that the financial result was also impacted by the effects of the exchange rate variation on offshore loans and on the Company’s overseas investments, which totaled R$24.5 million in 2019. This was offset by the income and social contribution taxes line (hedge structure). The table below isolates both financial result as well as income tax and social contribution effects. 2019/2018 Headge Impact in the Results 2019 2018 (%) Net Financial Income 106,905 (53,682) - (+/-) Effects of the hedge on net financial income 24,457 88,919 -72.5% Adjusted net financial income (excluding the effects of the hedge) 131,362 35,237 272.8%

Income before income tax 3,339,046 2,338,409 42.8% (+/-) Effects of the hedge on net financial income 24,457 88,919 -72.5% Income before tax and social contribution (excluding hedge effect) 3,363,503 2,427,328 38.6%

Income and social contribution taxes (625,842) (250,058) 150.3% (+/-) Effects of the hedge on income and social contribution taxes (24,457) (88,919) -72.5% Adjusted income and social contribution taxes (excluding the effects of the hedge) (650,299) (338,977) 91.8%

Income tax and social contribution (In thousand of Brazilian Reals, 2019/2018 2019 2018 unless otherwise indicated) (%) Income tax and social contribution (625,842) (250,058) 150.3% Current (193,543) 9,684 - Deferred (432,299) (259,742) 66.4% Income tax and social contribution totaled R$625.8 million in 2019 and was affected by the payment of interest on equity (IoC) in the amount of R$1,559.0 million. Current tax totaled R$193.5 million and includes R$6.8 million with cash impact. Deferred

8The number of shares equivalent to the amounts under discussion is 5,186,739 B3SA3 shares. B3SA3's closing price as at the end of Dec/19 was R$42.97 against R$26.81 as at the end of Dec/18, which represents a 60.3% increase.

MANAGEMENT REPORT - 2019 income tax and social contribution totaled R$432.3 million, without any cash impact, and mainly consisted of the temporary difference in the amortization of goodwill for tax purposes of R$478.5 million in 2019, and the creation of deferred tax of R$46.2 million (positive), which was mainly related to the setting up of tax credits. In addition, the income tax and social contribution line was also impacted by the hedge structure, as mentioned above. Net income Net income attributable to B3's shareholders totaled R$2,714.2 million, an increase of 30.0%, reflecting the Company's positive operating performance in all of its business lines in the year.

2019/2018 Adjustments to net income 2019 2018 (%) Net income (attributable to shareholders) 2,714,166 2,087,444 30.0% (+) Expenses related to the combination with Cetip - 41,793 - (+) Non-recurring provisions - 6,233 - (+) Impairment - 5,757 - (+) Amortization of intangibles from combination with Cetip 522,998 493,260 6.0% Recurring net income 3,237,164 2,634,485 22.9% (+) Deferred Tax (goodwill from Cetip combination) 478,516 478,516 0% Recurring net income adjusted by goodwill tax benefit 3,715,680 3,113,001 19.4% Note: amounts net of tax calculated at a rate of 34% applied to the deductible portion. Excluding the non-recurring items mentioned above, net income would have totaled R$3,237.2 million9, an increase of 22.9%. Moreover, if adjusted for the tax benefit resulting from the amortization of goodwill in connection to the merger of Cetip, net income would have totaled R$3,715.7 million. MAIN ITEMS OF THE CONSOLIDATED BALANCE SHEET AS AT DECEMBER 31, 2019 Asset, Liability and Shareholders' Equity Accounts The Company ended the year with total assets of R$40.0 billion, an increase of 6.3% against Dec/18. The main change in assets occurred in Cash and Cash Equivalents and Financial Investments (current and non-current), which together totaled R$11.2 billion, reflecting (i) the Company's cash generation over the course of the year, and (ii) the increased volume of collateral deposited in cash (counterpart in current liabilities). This cash position includes R$0.8 billion in distributions made in Jan’20, related to the fiscal year 2019, which include IoC, dividends and share buybacks. In addition, there was a significant variation in the Derivative financial instruments line, mainly because of the Company's hedge programs, which are based on instruments to protect against the risk of fluctuations in the exchange rate and in B3SA3's share price. In relation to liabilities, at the end of 2019, B3 showed gross debt of R$4.1 billion (45.0% long term and 55.0% short term), which corresponds to 1.0x the recurring EBITDA for the last 12 months. Shareholders' equity at the end of Dec/19 was R$25.4 billion, consisting mainly of the capital reserve of R$18.1 billion and the share capital of R$3.5 billion. OTHER FINANCIAL INFORMATION CAPEX In 2019, CAPEX totaled R$279.1 million, mainly related to upgrades of systems and technology for all the segments in which B3 operates, as well as to product development and to the design of the Company's new building structure (engineering, furniture and technology). Budgets of adjusted expenditure10, depreciation and amortization and investments11 for 2020: In December 2019, the Company announced the intervals of the budgets for adjusted operating expenses, depreciation and amortization, revenue-linked expenses and investments planned for 2020, as follows: (i) Budget for adjusted operating expenses from R$1,125 million to R$1,175 million (R$1,074.2 million in 2019); (ii) Budget for depreciation and amortization, including the amortization of intangibles and surplus value, from R$1,030 million to R$1,080 million (R$1,030 million in 2019); (iii) Budget for revenue-linked expenses, from R$105 million to R$125 million (R$239 million in 2019); and (iv) Budget of CAPEX, from R$300 million to R$330 million (R$279.1 million in 2019).

9 B3's objective in presenting the recurring net income metric is to facilitate the comparison between periods and, consequently, the assessment of the Company's performance, highlighting non-recurring items which are not necessarily directly related to the normal course of its business. 10Expenses adjusted for: i) depreciation and amortization; (ii) long-term share-based incentive program - principal and charges; (iii) business combination with Cetip; (iv) provisions and (v) revenue-linked expenses. 11Does not include investments related to the business combination with Cetip.

MANAGEMENT REPORT - 2019

Distributions The distributions referring to the fiscal year of 2019 total R$3,537.8 million, including IoC, dividends and shares buybacks, the majority of which was distributed to the shareholders in 2019. Accordingly, B3's payout ratio for the year totaled 130.3%12. CORPORATE GOVERNANCE AND RISK MANAGEMENT B3 adopts a robust set of corporate governance practices that demonstrate its commitment to its shareholders, market participants and other stakeholders. The importance of good governance practices to B3's long-term success is even clearer given its capital structure without a controlling shareholder or group of shareholders, as well as due to its institutional responsibility to develop the markets that it manages. These efforts were recognized by the market in 2019: B3 received the “Época Negócios 360º” award in the Corporate Governance category. Internal Audit The Internal Audit's mission is to provide the Board of Directors, the Audit Committee and the Executive Board with independent, fair and timely assessments, advices and insights on the effectiveness of risk management and governance processes, as well as on the adequacy of controls and on the compliance with rules and regulations associated with the Company's and its subsidiaries' operations. In line with the best international practices and a strong risk management culture, B3, since 2015, has had Internal Audit Activity certification, which recognizes corporations that adopt the best practices and international standards in internal audit, as issued by The Institute of Internal Auditors (“The IIA”). Internal Controls, Compliance and Corporate Risk B3 adopts the structure of 4 lines of defense as a governance model and basis for its risk management, with a clear definition of the roles of those responsible for managing, supervising and assessing the risks: 1st line of defense - the Business Units and managers are responsible for establishing, maintaining, promoting and assessing efficient business practices and adequate and effective internal controls. 2nd line of defense - the Governance and Integrated Management department is responsible for defining methods for assessing and monitoring the risks of the business and of the internal controls system, as well as for complying with the rules and regulations issued by the regulatory bodies, especially Brazilian Securities Commission (CVM) and the Brazilian Central Bank (BCB). 3rd line of defense - the Audit department is responsible for encouraging independent assessment of the activities developed by B3's areas, enabling management to measure the adequacy of the controls, the effectiveness of risk management, the governance processes, and the adequacy of the controls that support the financial statements and compliance with the rules and regulations. 4th line of defense - the independent External Audit, which reviews the financial statements; and the regulatory bodies, especially BCB and CVM, which carry out an assessment as to whether B3 has an adequate infrastructure for carrying out its systemic activities and complying with the existing rules. Central Counterparty Risk - Collateral Administration Management The operations carried out in the Listed segment are guaranteed by deposits of assets to meet margin requirements. Such collateral can be deposited in cash, public and private securities, bank surety letters, shares and international bonds, along with others. In Dec/19, the collateral deposited by the participants totaled R$353 billion, an amount 11.6% higher than the total deposited at the end of 2018, reflecting the increase in the volume of business carried out. PEOPLE One of B3's values is to promote an environment for people to develop. This year, the Company carried out development initiatives for managers and teams that totaled more than 40 thousand hours of training. Moreover, the B3 Reconhece platform was launched, where B3's professionals can acknowledge the behavior of their colleagues who live up to the Company's values. The acknowledgments made can be exchanged for development initiatives inside and outside B3. There was also a review of the performance cycle and the total compensation model, contributing to the evolution of internal meritocracy and market competitiveness. And the #MovimentoB3 initiative was created to promote coherence between culture, practices and processes. This initiative includes a new building structure with more space for collaboration, remote working and

12Payout ratio is the ratio of earnings distributed to the shareholders, calculated by the formula: (Earnings/Corporate Income).

MANAGEMENT REPORT - 2019 a new dress code, making the way that our people dress more flexible, promoting well-being and giving each person greater freedom to express their personal style. In order to make strategy, decisions and dialogues even more complete, B3 offers a diverse and inclusive environment, where authenticity is encouraged. For the very first time we carried out the Diversity Census in order to deepen insights, with a view to building a coherent plan for the Company's future. At the same time, we held lectures about the theme and set up Diversity Centers, made up of B3 employees and interns, from different areas, and divided into five fronts: Race and Ethnicity, Gender, People with Disabilities, LGBT+ and Generations. On each of these fronts, they are responsible for evaluating scenarios and suggest strategies and action plans so that B3 continues improving and addressing the demands related to each of these groups. The company's senior management has backed the adoption of corporate initiatives proposed by these groups of employees. The result of all this work can be seen from the progress in the Great Place To Work Survey, in which B3 was certified as having people management practices recognized by one of the main global authorities on the subject. In addition, B3 was once again included in the ranking of the 50 most loved companies by Love Mondays, out of a universe of more than 100 thousand companies in Brazil. Last but not least, B3 was certified by the Top Employers Institute, which is present in 118 countries and recognizes companies that offer excellence in relation to Human Resources practices. SUSTAINABILITY

In recognition of its social and environmental policies and practices, B3 was selected to be included in the London Stock Exchange's FTSE4 Good Latin America Sustainability Index for the third year in a row and it was included in B3's Carbon Efficient Index (ICO2) for the 10th year in a row. In February, B3 became a partner of the Climate Commitment Program with the aim of reinforcing its role of mobilizing the capital markets in relation to sustainability and climate responsibility actions. Also, on this theme, the green bonds program celebrated its 1st anniversary and, in 2019, totaled R$5.2 billion, with 15 issues (14 of debentures and 1 CRI) by 10 companies. With regard to diversity, for the third year in a row B3 held the Ring the Bell for Gender Equality, which is a worldwide mobilization of stock exchanges in favor of gender equality, in partnership with the Sustainable Stock Exchanges Initiative (SSE), Global Compact, UN Women, International Finance Corporation (IFC), Women in ETFs (WE) and World Federation of Exchanges (WFE), and for the first time took part in the Ring the Bell for Financial Literacy, a global initiative organized by the International Organization of Securities Commissions (IOSCO) to disseminate the relevance of financial education and of investor protection. SELF-REGULATION OF ISSUERS AND PARTICIPANTS With the objective of ensuring issuers' adherence to the regulation, equalization of market practices and equality in relation to access to information, B3 engages in the self-regulation of issuers listed in its markets and in the scope of the cooperation agreements signed with CVM for the monitoring of information disclosed by issuers. As a result of this activity, in 2019, over 22 thousand documents published by companies were analyzed and approximately 500 demands were made for failure to adhere to the current regulations, while, in the case of listed funds, more than 7 thousand documents were examined and about 300 demands were made. In compliance with the provisions of the Regulations for Listing Issuers and Admission to Trading of Securities and in the regulations for special segments, B3 is required to inform the market about how it allocated the proceeds from the fines applied under the scope of its enforcement process for those activities associated with the regulatory and institutional improvement of the securities market. Therefore, in relation to system improvements, roughly R$1.4 million was invested - including development and improvements to the Issuer Portal and the NoMe System. In relation to the development of the regulatory framework, approximately R$1.0 million was invested in promoting discussions with the market, such as an event and study on plural voting, the implementation of inspection and control mechanisms and guidance regarding distance voting, among others. In addition, throughout 2019, particularly in the second semester, B3 participated in relevant initiatives under the scope of the Capital Markets Initiative (IMK), coordinated by the Ministry of the Economy. Among other issues, B3 discussed proposals related to the development of the fixed income and equities markets in Brazil with measures aimed at simplifying and harmonizing the rules that govern issues and trading in the Brazilian capital markets, in particular, with a view to making it feasible to set up an environment for long-term financing for small and medium-sized enterprises (access market). In addition to the self-regulation applicable to issuers, the markets managed by B3 and its participants are supervised and inspected with the aim of promoting integrity, transparency and efficiency by means of BM&FBOVESPA Market Supervision (BSM). BSM discloses the results of its efforts on the website www.bsmsupervisao.com.br/. EXTERNAL AUDIT The Company hired Ernst & Young Auditores Independentes to provide external audit services for its financial statements for the year 2019. The company’s policy, and that of its subsidiaries, on contracting external audit services is based on internationally accepted principles that preserve the independence of work of this nature and consist of the following practices: (i) the auditor cannot 10

MANAGEMENT REPORT - 2019 perform executive and managerial functions either within the Company, or its subsidiaries; (ii) the auditor cannot play an operational role within the Company and its subsidiaries that may prejudice the efficacy of the audit work; and (iii) the auditor must remain impartial – avoiding the existence of conflicts of interest and loss of independence – and the objectiveness of his opinions and pronouncements about the financial statements. During the year ended December 31, 2019, Ernst & Young Auditores Independentes was hired to provide services unrelated to the external audit, with the total amount in relation to this contract being less than 5% of the total fees for the external audit services estimated for the year. The service was the preparation and issue of a valuation report of net book value determined by means of the accounting books (the “Report”) of BLK Sistemas Financeiros Ltda. DECLARATION BY THE EXECUTIVE BOARD In compliance with the provisions of CVM Instruction No. 480, the Executive Board declares that it has discussed, reviewed and agreed with the financial statements for the year ended December 31, 2019 and with the opinions expressed in the independent auditors' opinion. ADDITIONAL INFORMATION The focus of this Management Report was the performance and main achievements in the year 2019. For additional information about the Company and its market of operation, see the Reference Form available on B3's Investor Relations website (https://ri.b3.com.br/) and on the Brazilian Securities Commission's website (www.cvm.gov.br). ACKNOWLEDGMENTS Finally, the Company would like to thank its employees, for all their efforts throughout the year, as well as its suppliers, shareholders, financial institutions, clients and other stakeholders for the support received in 2019.

São Paulo Corporate Towers Av. Presidente Juscelino Kubitschek, 1.909 Vila Nova Conceição 04543-011 - São Paulo – SP - Brasil

Tel: +55 11 2573-3000 ey.com.br

A free translation from Portuguese into English of Independent Auditor’s Report on individual and consolidated financial statements prepared in accordance with accounting practices adopted in Brazil and in accordance with International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB) and in Reais (R$).

Independent Auditor’s Report on Individual and Consolidated Financial Statements

The Board of Directors and Shareholders of

B3 S.A. - Brasil, Bolsa, Balcão

São Paulo, Brazil

Opinion

We have audited the individual and consolidated financial statements of B3 S.A. - Brasil, Bolsa, Balcão (“B3” or “Company”), identified as B3 and Consolidated, respectively, which comprise the balance sheet as at December 31, 2019, and the statements of income, of comprehensive income, of changes in equity and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the individual and consolidated financial position of B3 S.A. – Brasil, Bolsa, Balcão at December 31, 2019, and its individual and consolidated financial performance and its cash flows for the year then ended in accordance with accounting practices adopted in Brazil and with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).

Basis for Opinion

We conducted our audit in accordance with Brazilian and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the individual and consolidated financial statements section of our report. We are independent of the Company and its subsidiaries in accordance with the relevant ethical principles set forth in the Code of Ethics for Professional Accountants and in the professional standards issued by Brazil’s Association of State Boards of Accountancy (CFC) and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our audit opinion.

Uma empresa-membro da Ernst & Young Global Limited Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the individual and consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter, including any commentary on the findings or outcome of our procedures, is provided in that context.

We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the individual and consolidated financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.

1. Technology environment

B3 operates in a complex technology environment with multiple systems in operation and a high volume of transactions. Due the fact that the B3’s operations are extremely dependent on the proper operation of the technology structure and its systems, we considered the technology environment a key audit matter.

How our audit addressed this matter:

Our audit procedures included, among others, evaluating the design and operational effectiveness of the general technology controls (“ITGC”) implemented by the Company for systems considered significant to the audit. The ITGC evaluation included audit procedures to assess controls over logical accesses, change management and other technology aspects. With regard to the audit of logical accesses, we analyzed, on a sample basis, the process for authorizing and granting new users’ access, timely removal of access to transferred or terminated employees, and review of users on a regular basis.

In addition, we evaluated password, security settings, and technology resource access policies. Regarding the change management process, we evaluated whether changes to the systems were properly authorized and approved by B3 management. We also analyzed the operations management process, focusing on the policies to safeguard information and timely handling of incidents.

In the processes considered significant for the financial statements, we identified the main automated or IT-dependent controls, so that, on a sample basis, we could perform tests focused on the design and operational effectiveness of such controls. In addition, we evaluated whether business continuity guidelines follow market standards and whether the incidents reported throughout the year were referred to the Business Continuity Committee. We involved our technology professionals in performing these procedures.

Our procedures performed in the design and operation of ITGC, as well as of automated controls and IT-dependent controls, deemed significant in the audit process, provided us with a basis for planning the nature, timing and extent of our substantive audit procedures.

2. Role of central counterparty and guarantor in the market

B3 is a vertically integrated multi-asset and multi-market stock exchange, a model where a single agent is responsible for all phases of the market’s trading and post-trading process. Accordingly, the Company operates as an asset central depository, clearing and settlement house and central counterparty. In its role of central counterparty and guarantor, B3 becomes, for settlement purposes, buyer of all sellers and seller for all buyers. This requires B3 to establish mechanisms to fully and partially estimate and hedge losses, if any, arising from non-settlement of one or more participants and to maintain financial investments in highly-liquid assets with low exposure to market and credit risk.

As at December 31, 2019, B3 has R$361 billion in collaterals deposited by participants, as described in Note 14, which was considered appropriate in forming an opinion on the financial statements taken as a whole. We consider this to be a key audit matter due to the amounts involved and the Company’s role as Financial Market Infrastructure.

How our audit addressed this matter:

Our audit procedures included, among others, understanding the chambers’ activities, focusing on the Risk Modeling, Central Counterparty Risk, Collateral Management and Pricing processes. In these processes, we evaluated the aspects of organizational structure and governance, definition of strategy and boundaries, policies and measurement methodologies. We also identified and evaluated the design and operational effectiveness of key controls related to pricing, calculation and margin call.

Considering the methodology used by B3, we performed an independent recalculation of the margin required in certain scenarios and periods, and also recalculated the allocations of collaterals. We checked the reconciliation of information disclosed in the notes with the operational system’s reports as at December 31, 2019, in addition to checking the custody statements for a sample of assets.

We involved our subject matter experts in risk management and controls in performing these procedures.

The results of our audit procedures on the test of collaterals deposited by market participants were consistent with those assessed and disclosed by management, according to Note 14, and were considered appropriate in forming an opinion on the financial statements taken as a whole. 3. Goodwill impairment tests of Bovespa Holding S.A. and CETIP S.A. - Mercados Organizados

The Company has R$22 billion recorded in its statement of financial position referring to goodwill generated on the acquisitions of Bovespa Holding S.A. and CETIP S.A. - Mercados Organizados.

The goodwill impairment test involves significant judgment in determining the assumptions used in the cash flow projections, including growth and discount rates. Due to the significance of the amounts involved, misstatements, if any, in determining the recoverable amounts of goodwill recorded, may result in a significant impact on the financial statements. Accordingly, this issue was considered a key audit matter.

How our audit addressed this matter:

Our audit procedures included, among others, the analysis of the methodology and models used by management in evaluating goodwill, including the definition of assumptions that support the cash flow projections considered in the impairment tests of these assets. We evaluated the consistency of data used against market prospects. We performed an independent discount rate calculation, using our market premium, comparable companies’ beta and country risk assumptions, among others. We involved our valuation subject matter experts in these procedures.

We crosschecked the assertiveness of projections made by management in prior periods with the performance achieved by B3. We analyzed the behavior of significant assumptions adopted under stress scenarios, in order to anticipate methodology sensitivities.

In addition, we also crosschecked the recoverable amount determined based on the discounted cash flows, per cash-generating unit, with the respective carrying amount of goodwill and assessed the adequacy of the disclosures made in Note 8 to the financial statements.

Based on the audit procedures performed in relation to goodwill impairment tests prepared by Company management, and on the audit evidence obtained that supports our tests, including our sensitivity analyses, we consider that goodwill impairment assessments, prepared by the Company, as well as the respective disclosures, are appropriate, in the context of the financial statements taken as a whole.

4. Disclosure and provisions for tax, civil and labor contingencies

As described in Note 11, B3 and its subsidiaries are parties to various legal and administrative proceedings involving labor, tax and civil matters arising from the ordinary course of their business.

The assignment of the likelihood of loss to the lawsuits involves a high degree of subjectivity on the part of the legal advisors in charge of the defense, as well as on the part of B3 management, and take into consideration, among others, aspects related to the existence of case law, recurrence of the demands presented and measurement of future disbursements, if any. Due to the significant, complexity and judgment involved in the assessment, definition of the timing for recognition, measurement and disclosures related to tax, civil and labor contingencies, we considered this matter to be significant to the audit process.

How our audit addressed this matter:

Our audit procedures included, among others, obtaining letters of confirmation regarding ongoing lawsuits, directly from the Company’s legal advisors for December 31, 2019, and crosschecking the likelihood of loss and amounts attributed against operational controls and accounting records.

For the most significant lawsuits, we tested the calculation of amounts recorded and disclosed and evaluated the likelihood in relation to well-known case law and legal theses. We involved our subject matter experts of Taxes in performing these procedures.

We also analyzed communications received from regulators related to lawsuits, assessments and disputes to which the Company is a party, and the sufficiency of disclosures related to issues arising from contingencies and provisions recorded.

Finally, we also assessed the adequacy of the disclosures made by the Company regarding tax, civil and labor contingencies, included in Note 11 to the financial statements.

Based on the audit procedures performed on tax, civil and labor contingencies and on the results obtained, we consider that the provisions and disclosures prepared by management are appropriate in the context of the financial statements taken as a whole.

Other matters

Statements of value added

The individual and consolidated statements of value added (SVA) for year ended December 31, 2019, prepared under the responsibility of Company management, and presented as supplementary information for purposes of IFRS, were submitted to audit procedures conducted together with the audit of the Company’s financial statements. To form our opinion, we evaluated if these statements are reconciled to the financial statements and accounting records, as applicable, and if their form and content comply with the criteria defined in Accounting Pronouncement NBC TG 09 - Statement of Value Added. In our opinion, these statements of value added were prepared fairly, in all material respects, in accordance with the criteria defined in abovementioned accounting pronouncement and are consistent in relation to the overall individual and consolidated financial statements. Other information accompanying the individual and consolidated financial statements and the auditor’s report

Management is responsible for such other information, which comprise the Management Report.

Our opinion on the individual and consolidated financial statements does not cover the Management Report and we do not express any form of assurance conclusion thereon.

In connection with our audit of the individual and consolidated financial statements, our responsibility is to read the Management Report and, in doing so, consider whether this report is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of the Management Report, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the individual and consolidated financial statements

Management is responsible for the preparation and fair presentation of the individual and consolidated financial statements in accordance with the accounting practices adopted in Brazil and with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the individual and consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company and its subsidiaries or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s and its subsidiaries’ financial reporting process, which include Management, Audit Committee and the Board of Directors. Auditor’s responsibilities for the audit of the individual and consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the individual and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Brazilian and International standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Brazilian and International Standards on Auditing, we exercised professional judgment and maintained professional skepticism throughout the audit. We also:

Ø Identified and assessed the risks of material misstatement of the individual and consolidated financial statements, whether due to fraud or error, designed and performed audit procedures responsive to those risks, and obtained audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Ø Obtained an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s and its subsidiaries’ internal control.

Ø Evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Ø Concluded on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the individual and consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Ø Evaluated the overall presentation, structure and content of the individual and consolidated financial statements, including the disclosures, and whether the individual and consolidated financial statements represent the corresponding transactions and events in a manner that achieves fair presentation. Ø Obtained sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicated with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we may have identified during our audit.

We also provided those charged with governance with a statement that we have complied with relevant ethical requirements, including those regarding independence, and communicated with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Concluded on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the individual and consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

São Paulo, March 5, 2020.

ERNST & YOUNG Auditores Independentes S.S. CRC-2SP034519/O-6

Flávio Serpejante Peppe Partner

B3 S.A. - Brasil, Bolsa, Balcão

Balance sheet At December 31, 2019 and 2018 (In thousands of reais)

B3 Consolidated Assets Notes 2019 2018 2019 2018

Current assets 9,532,465 6,564,077 10,454,127 7,460,740 Cash and cash equivalents 4(a) 391,934 291,812 494,033 329,687 Financial investments 4(b) 7,884,389 5,639,356 8,631,578 6,487,587 Derivative financial instruments 4(c) 345,422 24,839 345,422 24,839 Accounts receivable 5 330,912 318,378 339,320 323,822 Taxes recoverable 16(d) 464,719 228,163 481,477 232,910 Prepaid expenses 96,075 43,471 96,575 43,491 Other receivables 19,014 18,058 65,722 18,404

Noncurrent assets available to sell 14,878 14,878 14,878 14,878

Noncurrent assets 31,105,424 31,642,079 29,558,310 30,196,627

Long-term receivables 2,226,936 2,286,165 2,333,685 2,388,707 Financial investments 4(b) 1,931,578 1,653,205 2,037,970 1,755,193 Derivative financial instruments - 257,185 - 257,185 Judicial deposits 11(h) 274,633 363,379 274,990 363,933 Prepaid expenses 20,725 12,396 20,725 12,396

Investments 1,830,502 1,596,286 47,223 45,591 Interest held in subsidiaries and associate 6(a) 1,830,502 1,596,286 22,660 19,510 Investment properties 6(b) - - 24,563 26,081

Property and equipment 7 679,880 625,598 689,853 627,325

Intangible assets 8 26,368,106 27,134,030 26,487,549 27,135,004

Total assets 40,652,767 38,221,034 40,027,315 37,672,245

See accompanying notes.

B3 S.A. - Brasil, Bolsa, Balcão

Balance sheet At December 31, 2019 and 2018 (In thousands of reais)

B3 Consolidated Liabilities and equity Notes 2019 2018 2019 2018

Current liabilities 7,680,989 6,469,185 8,055,193 5,755,789 Collateral for transactions 14 3,013,447 2,110,933 3,013,447 2,110,933 Earnings and rights on securities in custody 21(c) 69,897 59,850 69,897 59,850 Suppliers 178,030 188,655 184,390 190,569 Salaries and social charges 21(a) 393,862 325,385 402,509 326,675 Taxes and contributions payable 21(b) 290,507 116,194 312,689 125,624 Loans and financing 9 2,806,345 3,171,823 2,537,993 1,777,213 Derivative financial instruments 4(c) 794 7,288 794 7,288 Dividends and interest on equity payable 676,224 370,203 676,224 370,203 Revenues to be allocated 52,703 43,601 52,703 43,601 Other liabilities 10 199,180 75,253 804,547 743,833

Noncurrent liabilities 7,583,777 6,718,880 6,570,889 6,872,260 Loans and financing 9 2,851,252 2,585,445 1,826,554 2,731,946 Deferred income tax and social contribution 16(a) 3,781,389 3,344,459 3,788,388 3,344,440 Provisions for tax, civil, labor and other contingencies 11(e) 866,299 714,145 870,210 721,043 Revenues to be allocated 57,736 47,606 57,736 47,606 Other liabilities 10 27,101 27,225 28,001 27,225

Equity 12 25,388,001 25,032,969 25,401,233 25,044,196 Capital and reserves attributable shareholders of B3 Capital 3,548,655 3,548,655 3,548,655 3,548,655 Capital reserve 18,104,738 18,066,178 18,104,738 18,066,178 Revaluation reserves 17,845 18,431 17,845 18,431 Income reserves 2,876,239 3,523,443 2,876,239 3,523,443 Treasury shares (196,619) (165,635) (196,619) (165,635) Other comprehensive income 42,896 41,897 42,896 41,897 Proposed additional dividend 994,247 - 994,247 - 25,388,001 25,032,969 25,388,001 25,032,969 Non-controlling interests - - 13,232 11,227

Total liabilities and equity 40,652,767 38,221,034 40,027,315 37,672,245

See accompanying notes.

B3 S.A. - Brasil, Bolsa, Balcão

Statement of income Years ended December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

B3 Consolidated Notes 2019 2018 (*) 2019 2018 (*)

Revenues 17 5,786,552 4,745,375 5,907,756 4,831,915

Expenses (2,607,421) (2,401,181) (2,678,765) (2,433,249) General and administrative Personnel and charges (786,295) (738,214) (829,171) (754,122) Data processing (193,977) (187,257) (199,452) (189,997) Depreciation and amortization 6(b), 7 e 8 (1,022,985) (951,579) (1,030,250) (953,105) Revenue-linked expense (233,300) (194,898) (239,246) (198,212) Third-party services (67,031) (85,525) (69,988) (86,670) Maintenance in general (19,910) (18,209) (23,300) (20,606) Promotion and publicity (32,144) (31,097) (32,553) (31,240) Taxes and charges (11,486) (8,611) (13,123) (10,291) Board and committee members (14,230) (14,303) (14,230) (14,303) Sundry expenses 18 (226,063) (171,488) (227,452) (174,703)

Impairment of assets - (8,722) - (8,722) Equity pickup 6(a) 139,931 275,561 3,150 2,147

Financial result 19 (3,333) (299,119) 106,905 (53,682) Financial income 543,565 478,536 552,406 487,723 Financial expenses (473,751) (515,847) (422,624) (456,990) Net exchange rate variations (73,147) (261,808) (22,877) (84,415)

Income before income taxes 3,315,729 2,311,914 3,339,046 2,338,409

Income tax and social contribution 16(c) (601,563) (224,470) (625,842) (250,058) Current (164,786) 35,367 (193,543) 9,684 Deferred (436,777) (259,837) (432,299) (259,742)

Net income for the years 2,714,166 2,087,444 2,713,204 2,088,351

Attributable to: Shareholders of B3 2,714,166 2,087,444 2,714,166 2,087,444 Non-controlling interests - - (962) 907

Earnings per share attributable to shareholders of B3 (in R$ per share) 12(g) Basic earnings per share 1.326246 1.021683 Diluted earnings per share 1.321647 1.016307

(*) Restatement according to Note 2 (e)(ii)

See accompanying notes.

B3 S.A. - Brasil, Bolsa, Balcão

Statement of comprehensive income Years ended December 31, 2019 and 2018 (In thousands of reais)

B3 Consolidated Notes 2019 2018 2019 2018

Net income for the years 2,714,166 2,087,444 2,713,204 2,088,351 Other comprehensive income to be reclassified to P&L for the year in subsequent years (8,703) 10,745 (8,703) 10,745

Translation adjustments Exchange rate variation on investment in foreign subsidiary 6(a) - - 702 277 - - 702 277 Cash flow hedges Amount of cash flow hedging instruments, net of taxes 31,546 40,710 31,546 40,710 Transfer to income of cash flow hedging instrument, net of taxes (39,698) (27,663) (39,698) (27,663) (8,152) 13,047 (8,152) 13,047 Financial instruments measured at fair value through comprehensive income Market to market of other financial assets, net of taxes (1,254) (3,199) (1,253) (2,579) (1,254) (3,199) (1,253) (2,579) Comprehensive income (loss) of subsidiary Translation adjustments of subsidiary 6(a) 702 277 - - Other comprehensive income (loss) of subsidiary 6(a) 1 620 - - 703 897 - -

Other comprehensive income not reclassified to P&L for the year in subsequent years 9,702 (2,850) 9,702 (2,850)

Cash flow hedges Amount of cash flow hedging instruments, net of taxes (7,557) (15,731) (7,557) (15,731) Market to market of equity instruments, net of taxes 8,765 (7,335) 8,765 (7,335) Exchange rate variation on financial assets, net of taxes 8,494 20,216 8,494 20,216 9,702 (2,850) 9,702 (2,850)

Total comprehensive income for the years 2,715,165 2,095,339 2,714,203 2,096,246

Attributable to: 2,715,165 2,095,339 2,714,203 2,096,246 Shareholders of B3 2,715,165 2,095,339 2,715,165 2,095,339 Non-controlling interests - - (962) 907

See accompanying notes.

B3 S.A. - Brasil, Bolsa, Balcão Statement of changes in equity Years ended December 31, 2019 and 2018 (In thousands of reais)

Attributable to shareholders of B3 Income reserves (Note 12(e)) Revaluation Treasury Other Proposed Non- Capital reserves Legal Statutory shares comprehensive additional Retained controlling Total Notes Capital reserve (Note 12(c)) reserve reserves (Note 12(b)) income dividend earnings Total interests Equity

Balances at December 31, 2017 3,198,655 18,399,366 19,018 3,453 2,866,959 (221,759) 34,002 - - 24,299,694 10,320 24,310,014

Translation adjustments ------277 - - 277 - 277 Cash flow hedge ------13,047 - - 13,047 - 13,047 Financial instruments measured at fair value ------(2,579) - - (2,579) - (2,579) through comprehensive income Other comprehensive income not reclassified ------(2,850) - - (2,850) - (2,850) to income in subsequent periods

Total comprehensive income ------7,895 - - 7,895 - 7,895

Capital increase 350,000 (350,000) ------

Realization of revaluation reserves - subsidiaries - - (587) - - - - - 587 - - -

Transfer of treasury shares – stock grant plan 15(a) - (55,758) - - - 55,758 ------

Recognition of stock option plan - 354 - - - 366 - - - 720 - 720

Recognition of stock grant plan 15(a) - 72,216 ------72,216 - 72,216

Net income for the year ------2,087,444 2,087,444 907 2,088,351

Allocations of profit: Interest on Equity 12(f) ------(1,435,000) (1,435,000) - (1,435,000) Set-up of statutory reserves - - - - 653,031 - - - (653,031) - - -

Balances at December 31, 2018 3,548,655 18,066,178 18,431 3,453 3,519,990 (165,635) 41,897 - - 25,032,969 11,227 25,044,196

See accompanying notes.

B3 S.A. - Brasil, Bolsa, Balcão Statement of changes in equity Years ended December 31, 2019 and 2018 (In thousands of reais)

Balances at December 31, 2018 3,548,655 18,066,178 18,431 3,453 3,519,990 (165,635) 41,897 - - 25,032,969 11,227 25,044,196

Translation adjustments ------702 - - 702 - 702 Cash flow hedge ------(8,152) - - (8,152) - (8,152) Financial instruments measured at fair value ------(1,253) - - (1,253) - (1,253) through comprehensive income Other comprehensive income not reclassified ------9,702 - - 9,702 - 9,702 to income in subsequent periods

Total comprehensive income ------999 - - 999 - 999

Share buyback 12(b) - - - - - (75,531) - - - (75,531) - (75,531)

Realization of revaluation reserves - subsidiaries - - (586) - - - - - 586 - - -

Results of adoption of IFRS 16/CPC 06 (R2) 3(d) - (1,140) ------(1,140) - (1,140)

Transfer of treasury shares – stock grant plan 15(a) - (44,125) - - - 44,125 ------

Disposal of treasury shares - stock options exercised - (25) - - - 422 - - - 397 - 397

Recognition of stock grant plan 15(a) - 83,850 ------83,850 - 83,850

Non-controlling interests of BLK ------2,967 2,967

Prior years’ adjustments relating to subsidiary 6(a) ------44 44 - 44

Interest on equity and prescribed dividends ------2,166 2,166 - 2,166

Proposed additional dividend 12(f) - - - - (647,204) - - 650,000 (2,796) - - -

Net income for the year ------2,714,166 2,714,166 (962) 2,713,204

Allocations of profit: Dividends 12(f) ------344,247 (1,155,167) (810,920) - (810,920) Interest on Equity 12(f) ------(1,558,999) (1,558,999) - (1,558,999) Balances at December 31, 2019 3,548,655 18,104,738 17,845 3,453 2,872,786 (196,619) 42,896 994,247 - 25,388,001 13,232 25,401,233

See accompanying notes. 14

B3 S.A. - Brasil, Bolsa, Balcão

Statement of cash flow Years ended December 31, 2019 and 2018 (In thousands of reais)

B3 Consolidated Notes 2019 2018 2019 2018 Cash flow from operating activities

Net income for the years 2,714,166 2,087,444 2,713,204 2,088,351 Adjustments for: Depreciation and amortization 6(b), 7 and 8 1,022,985 951,579 1,030,250 953,105 Impairment of assets - 8,722 - 8,722 Deferred income tax and social contribution 16(a) 436,777 259,837 432,299 259,742 Equity pick-up 6(a) (139,931) (275,561) (3,150) (2,147) Stock grant plan expenses 15(a) 80,031 72,216 83,850 72,216 Interest expenses 19 369,344 432,559 315,548 371,902 Provision for tax, civil and labor contingencies 11(e) 164,748 87,290 165,221 80,081 Derivative financial instruments (95,049) (268,948) (95,049) (268,948) Exchange rate variation – Fair value hedge 9 95,411 346,882 95,411 346,882 Exchange rate variation - loans taken 9 71,934 261,527 23,385 85,020 Marked to market of fundraising 9 17,088 (27,867) 17,088 (27,867) Exchange rate variation of judicial deposits (9,929) (15,013) (9,728) (15,043) Other 18,295 12,827 19,714 21,039

Adjusted Net Income 4,745,870 3,933,494 4,788,043 3,973,055

Variation in financial investments and collateral for transactions (1,666,047) (540,853) (1,568,396) (842,063) Effect of exchange rate variation on cash flow hedge - (1,057) - (1,057) Variation in taxes to be offset and recoverable (236,556) 254,236 (248,209) 255,171 Variation in accounts receivable (13,937) (48,670) (14,720) (49,665) Variation in other receivables 4,542 26,605 (46,677) 28,566 Variation in prepaid expenses (60,933) (4,278) (61,411) (4,276) Variation in judicial deposits 98,675 (1,935) 98,671 (1,935) Variation in earnings and rights on securities in custody 10,047 (3,277) 10,047 (3,277) Variation in suppliers (10,625) 55,542 (14,129) 56,723 Variation in taxes and contributions payable 174,313 (52,854) 186,213 (66,026) Variation in salaries and social charges 68,477 58,007 72,589 57,725 Variation in other liabilities 81,090 (29,761) 14,965 257,254 Variation in revenues to be allocated 19,232 13,722 19,232 13,722 Variation in provision for tax, civil, and labor contingencies 11(e) (12,594) (7,403) (16,227) (7,403)

Net cash from operating activities 3,201,554 3,651,518 3,219,991 3,666,514

Cash flow from investing activities

Sale of property and equipment 878 4,466 867 4,198 Purchase of property and equipment 7 (139,111) (143,191) (140,266) (143,212) Dividends and Interest on equity received 39,621 47,307 - - Settlement of derivative financial instrument 1,355 (14,960) 1,355 (14,960) Subsidiary Capital Increase 6(a) (33,389) (9,494) - - Subsidiary Capital Increase – Non-controlling interest - - 1,250 - Purchase of software and projects 8 (155,055) (126,676) (157,325) (127,648) Acquisition of subsidiary CETIP 6(a) (51,450) - (51,450) - Cash effect - acquisition of subsidiary - - 438 -

Net cash from investing activities (337,151) (242,548) (345,131) (281,622)

Cash flow from financing activities

Disposal of treasury shares - stock options exercised 398 720 398 720 Share buyback 12(b) (75,531) - (75,531) - Loans taken out 9 - - 204,990 - Debentures’ issue 9 1,200,000 - 1,200,000 - Cost of debentures taken out 9 (1,059) - (1,059) - Amortization of principal and interest on loans 9 (1,871,718) (1,950,692) (2,022,941) (1,901,073) Payment of interest on equity (2,061,738) (1,528,859) (2,061,738) (1,528,859)

Net cash used in financing activities (2,809,648) (3,478,831) (2,755,881) (3,429,212)

Net increase (decrease) in cash and cash equivalents 54,755 (69,861) 118,979 (44,320)

Balance of cash and cash equivalents at beginning of year 4(a) 83,125 152,986 121,000 165,320

Balance of cash and cash equivalents at end of year 4(a) 137,880 83,125 239,979 121,000

See accompanying notes.

B3 S.A. - Brasil, Bolsa, Balcão

Statement of value added Years ended December 31, 2019 and 2018 (In thousands of reais)

B3 Consolidated Notes 2019 2018 (*) 2019 2018 (*)

1 – Revenues 17 6,446,999 5,260,039 6,576,507 5,351,875

Registration, trading, clearance and settlement system 5,760,479 4,631,200 5,823,744 4,667,926 Technology, data and services 686,520 628,839 752,763 683,949

2 - Goods and services acquired from third parties 772,425 697,196 791,991 710,150

Expenses (a) 772,425 688,474 791,991 701,428 Impairment of assets - 8,722 - 8,722

3 - Gross value added (1-2) 5,674,574 4,562,843 5,784,516 4,641,725

4 - Retentions 1,022,985 951,579 1,030,250 953,105

Depreciation and amortization 6(b), 7 and 8 1,022,985 951,579 1,030,250 953,105

5 - Net value added produced by the Company (3-4) 4,651,589 3,611,264 4,754,266 3,688,620

6 - Value added received in transfer 683,496 754,097 555,556 489,870

Equity pickup 6(a) 139,931 275,561 3,150 2,147 Financial income 19 543,565 478,536 552,406 487,723

7 - Total value added to be distributed (5+6) 5,335,085 4,365,361 5,309,822 4,178,490

8 - Distribution of value added 5,335,085 4,365,361 5,309,822 4,178,490

Personnel and charges 786,295 738,214 829,171 754,122 Board and committee members’ compensation 14,230 14,303 14,230 14,303 Taxes, charges and contributions (b) Federal 1,165,083 659,144 1,196,126 689,683 Municipal 108,413 88,601 111,590 90,626 Financial expenses and net exchange rate variation 19 546,898 777,655 445,501 541,405 Interest on equity and dividends 12 (f) 2,714,166 1,435,000 2,714,166 1,435,000 Constitution of statutory reserve - 652,444 - 653,351 Net loss for the years – Non-controlling interests - - (962) -

(a) Expenses (excludes personnel, depreciation and amortization, taxes and charges and board and committee members’compensation). (b) Includes: taxes and charges, Contribution Taxes on Gross Revenue for Social Integration Program (PIS) and for Social Security Financing (COFINS), Service Tax (ISS), current and deferred Income tax and social contribution (IRPJ and CSLL).

(*) Restatement according to Note 2 (e)(ii).

See accompanying notes.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

1. Operations

B3 S.A. - Brasil, Bolsa, Balcão (“B3”) is a publicly-traded corporation headquartered in the city of São Paulo.

B3 is primarily engaged controlling or holding interest in entities that perform the following activities:

• Management of organized securities markets, ensuring the organization, operation and development of free markets open to negotiation of any types of securities or contracts based on or backed by financial assets, indices, indicators, rates, goods, currencies, energy products, transportation products, commodities, and other assets or rights directly or indirectly related thereto, for spot or future settlement;

• Maintenance of environment or systems appropriate for conducting purchases and sales, auctions and special operations involving securities, notes, rights and assets, in the exchange market and organized OTC market;

• Provision of registration, clearing, and physical and financial settlement services, by means of an internal facility or entity especially organized for this purpose, which may or may not act as central counterparty and guarantor of final settlement, under the terms of legislation currently in force and their internal regulations;

• Provision of central depository and fungible and non-fungible custody services for goods, marketable securities and any other physical and financial assets;

• Provision of services relating to standardization, classification, analysis, quotations, statistics, professional training, studies, publications, information, libraries and software development relating to subjects of interest to B3 and the participants in the markets directly or indirectly managed by B3;

• Provision of technical, administrative and management support for the purposes of market development, and educational, promotional and publishing activities relating to its corporate purpose and the markets managed by B3;

• Provision of services to effect the registration of liens and encumbrances on securities, notes and other financial instruments, including registration of instruments constituting collateral, in compliance with the applicable rules and regulations;

• Provision of services associated with support for credit, financing and lease operations, including by means of the development and operation of information technology and data processing systems, involving the automotive vehicle and real estate segments, among others, in compliance with the applicable rules and regulations;

• The construction of a database and related activities;

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

• Other activities authorized by the Brazilian SEC (CVM) or Central Bank of Brazil, which B3 Board of Directors considers to further the interests of participants in the markets managed by B3 and to contribute to their development and health; and

• Holding interest in other companies or associations based in Brazil or abroad, as a member, partner or shareholder, albeit not necessarily as controlling shareholder, provided their core activities are those expressly mentioned in the Company’s Articles of Association or the Board of Directors regards such participation as furthering the interests of participants in the markets managed by B3 and contributing to their development and health.

Concomitantly, B3:

• Organizes, develops and provides for the operation of free and open securities markets, for spot and future settlement. Its activities are carried out through its trading systems and clearing houses, and include transactions involving securities, interbank foreign exchange and securities under custody in the Special System for Settlement and Custody (SELIC);

• Manages organized over-the-counter markets, that is, trading and registration of securities, public and private fixed income securities and over-the-counter derivatives. It is a systemically important clearing and settlement house, under the terms defined by the Brazilian Payments System legislation (Law No. 10214), which keeps written custody of assets and contracts, registers transactions performed in the over-the-counter market, processes financial settlements and offers the market an electronic platform for performing various types of online transactions, such as auctions and trading of public, private and fixed income securities;

• Develops technology solutions and maintains high performance systems, providing its customers with security, agility, innovation and cost effectiveness. The success of its activities depends on the ongoing improvement, enhancement and integration of its trading and settlement platforms and its ability to develop and license leading-edge technologies required for the good performance of its operations; and

• Provides information on additions and eliminations of financial restrictions related to vehicle financing transactions, with an integrated nation-wide electronic system, providing critical infrastructure to the vehicle financing market.

Lastly, B3 always seeks to expand its product portfolio and thus strengthen the relationship and offer more complete solutions to its customers. Accordingly, and in compliance with its business purpose, B3 made acquisitions throughout 2019, as described below:

• On March 7, 2019, B3 completed the acquisition of 75% interest in BLK, a company founded in 2008 and specialized in electronic & algorithmic trading in Brazil. BLK creates and develops order execution software and algorithms for the capital and financial derivatives markets, including RoboTrader, its main platform.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

• On June 11, 2019, B3 completed the acquisition of 100% of the capital of Portal de Documentos, whose business purpose is to provide solutions for customers of notarial services, increasing efficiency through the following services: (i) integration and registration of electronic documents for document authentication purposes (out-of-court communications and notifications); (ii) submission and confirmation of e-mails read; (iii) technical support, maintenance and other information technology services; (iv) production of electronic documents with legal value; (v) document agents; and (vi) credit collection and recovery.

2. Preparation and presentation of quarterly information

This financial statement was approved by the Board of Directors of B3 on March 5, 2020.

The financial statements are prepared and presented in accordance with accounting practices adopted in Brazil.

All significant information used by Management in managing B3 is evidenced in these financial statements According Guidance OCPC 07.

a) Consolidated financial statements

The consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC), implemented in Brazil through the Brazilian FASB (CPC) and their technical interpretations (ICPC) and guidance (OCPC), approved by the Brazilian SEC (CVM).

The consolidated financial statements includes the balances of B3 and its subsidiaries, as well as special purpose entities comprising investment funds, as follows:

% - Ownership Interest

Direct subsidiaries and controlled entities: 2019 2018

Banco B3 S.A. (“Banco B3”) 100.00 100.00 Bolsa de Valores do Rio de Janeiro (“BVRJ”) 86.95 86.95 BM&FBOVESPA (UK) Ltd. (“UK Ltd.”) 100.00 100.00 BM&FBOVESPA BRV LLC (“BRV LLC”) 100.00 100.00 B3 Inova USA LLC (“B3 Inova”) 100.00 100.00 CETIP Info Tecnologia S.A. (“CETIP Info”) 100.00 100.00 CETIP Lux S.à.r.l. (“CETIP Lux”) 100.00 100.00 Portal de Documentos S.A. (“Portal de Documentos”) 100.00 - BLK Sistemas Financeiros Ltda. (“BLK”) 75.00 -

Exclusive investment funds:

BB Pau Brasil Fundo de Investimento Renda Fixa (“BB Pau Brasil FI RF”) Bradesco Fundo de Investimento Renda Fixa Longo Prazo Eucalipto (“Bradesco FI RF LP Eucalipto”) Imbuia FI Renda Fixa Referenciado DI (“Imbuia FI RF DI”)

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

In order to serve its customers and satisfy the specificities of the market in which it operates, by means of its wholly-owned subsidiary, Banco B3, the Company offers centralization of custody of the assets deposited as guarantee margin for operations to holders of access rights and their clearing houses.

Subsidiary UK Ltd., located in London, represents B3 abroad, through relationships with other stock exchanges and regulators, and assists in the pursuit of new customers for the market.

BRV LLC. jointly with B3, is the co-owner of all intellectual property rights related to the stock module of PUMA Trading System platform and any other modules jointly developed by the parties, the ownership of which is assigned to B3. Since it is primarily a subsidiary engaged in protecting rights, this special purpose entity is not expected to have operating activities.

Based in Luxembourg, CETIP Lux is engaged in the acquisition of interests in the capital of any entities or companies established in any form, and in the raising of funds

CETIP Info is a corporation headquartered in Santana de Parnaíba, in the state of São Paulo, whose corporate purpose is to provide services involving data processing and management of information technology systems, advisory and commercial representation on its own account and on behalf of third parties, intermediation of businesses in general, except in the real estate segment, and holding interests in the capital of other companies, either in the same segment or not.

B3 Inova, headquartered in the city of Wilmington, is engaged in investing capital in entities or companies established for any purpose.

Portal de Documentos is a company located in Barueri, state of São Paulo, engaged in providing solutions for customers of notarial services, increasing efficiency through the following services: (i) integration and registration of electronic documents for document authentication purposes; (ii) submission and confirmation of e-mails read; (iii) technical support, maintenance and other information technology services; (iv) production of electronic documents with legal value; (v) document agents; and (vi) credit collection and recovery.

BLK is limited liability company engaged in software development, software-related licensing or assignment of rights, information technology technical support and training, provision of information services, lease of website space, and holding interest in other companies as a partner, shareholder or member. b) Individual quarterly information

The individual financial statements (B3) were prepared in accordance with accounting practices adopted in Brazil, which comprise the provisions contained in the Brazilian corporation law (Law No. 6404/76), as amended by Laws No.11638/07 and No. 11941/09, and the pronouncements, interpretations and guidance of the Brazilian Financial Accounting Standards Board (CPC), approved by the Brazilian Securities and Exchange Commission (CVM).

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated) c) Functional currency

The individual and consolidated quarterly information was prepared and are presented in Brazilian reais, which is the functional currency of B3. d) Business combination

(i) BLK Sistemas Financeiros Ltda.

As disclosed in the Notice to the Market dated March 8, 2019, B3 completed the acquisition of a 75% interest in BLK after all condition’s precedent was met. This transaction was completed on March 7, 2019 (acquisition date) and includes purchase (by B3) and sale options (by the founding member of BLK, who will remain as the executive responsible for the transaction) to be settled in cash from the remaining 25% of capital, to be exercised under the terms of the transaction, including from March 2023.

The fair value of the consideration was R$13,395 fully paid in cash.

The BLK, founded in 2008, is one of the leading companies in the algorithms sector in Brazil, specialized in electronic & algorithmic trading, with emphasis on the creation and development of software and order execution algorithms for the capital markets and of financial derivatives, whose major customers are institutional investors and brokers. BLK main platform is RoboTrader.

This acquisition is in line with B3’s strategy to strengthen the relationship and deliver more complete solutions to its customers by expanding its product portfolio.

Until the completion of this financial statement, the transaction costs incurred are R$3,330 and were recorded in P&L of B3.

After the completion of referred to transaction, B3 recorded a negative result of R$3,618 as a result of the equity in income of BLK between the acquisition date and this financial statement reporting date.

Identifiable net assets acquired and goodwill

The difference between amount paid for the acquisition for the control of BLK and its net assets at fair value resulted in the recognition of goodwill for future profitability and tangible and intangible assets.

The allocation of the amount paid was based on a preliminary valuation of the fair value of the net assets acquired of BLK and is under review by Management and independent advisors. B3 expects to complete these studies in the coming months.

The fair value of the identifiable assets acquired, and liabilities assumed in the business combination was estimated using the projected discounted cash flow method and replacement cost. The fair value estimates using the discounted cash flow method were based on a discount rate of 13.31%. The portion of unidentifiable net assets of this business combination was allocated as goodwill.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

The purchase price allocated is as follows:

Base Date 03/07/2019 Purchase Price Allocation (PPA)

a) Purchase price 13,395

b) BLK’s negative equity (380)

c) Plus (less) value of assets and liabilities 5,904 Property and equipment 626 Platform (1) 8,320 Deferred tax liabilities (3,042)

d) Interest held by non-controlling interests on identifiable net assets (25%) (1,380)

a-b-c-d = Goodwill 9,251

(1) RoboTrader platform has an estimated useful life of 7 years.

The goodwill of R$9,251 represents the expected future economic benefit in the business combination. Currently, has no intention to merger BLK, therefore there is no estimate for tax deduction.

(ii) Portal de Documentos S.A.

As disclosed in the material news release of June 11, 2019, B3 has completed the acquisition of 100% interest in Portal de Documentos, following all the conditions precedent for the transaction, including confirmation of approval by the Brazilian antitrust enforcement agency ("CADE").

The transaction was concluded on June 11, 2019 (date of acquisition), and completion of the stage of fulfillment of conditions precedent resulted in adjustments to the economic terms of the transaction. The total final amount for the acquisition of Portal de Documentos may reach R$155,000, with a portion in cash and the remaining balance over a period of up to 4 years from the closing of the transaction, depending on the fulfillment of contractual conditions and the achievement of financial and operational goals.

The fair value of the portion paid in cash was R$38,055, adjusted by the net debt of Portal de Documentos estimated at R$2,507, which will be definitively, when B3 will make the required adjustment. Additionally, on the acquisition date, was recognized the amount of R$50,000 relating future installments (conditional and variable). The estimated fair value of these installments was calculated using Montecarlo Method (MMC), was recognized and is based on the discount rate equivalent to the long-term CDI and the estimated future revenues of the Portal de Documentos, adjusted for volatility of about 30%. In December 2019, B3 recorded positive P&L amounting to R$7,287 as a result of the fair value review of future installments, which were valued for the amount of R$42,713.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Founded in 2007, Portal de Documentos specializes in digital solutions for credit cycle participants, with procedures for collection of vehicle and real estate loans, through electronic notices and subpoenas, electronic protest, property consolidation and information package for filing of legal proceedings. In addition, it also conducts the electronic registration in notaries of property contracts, movable property, equipment and documents in general, to make such registration public and legally valid before third parties.

This acquisition is in line with B3's strategy of adding value to its customers, as it will increase and diversify the products offered to banks that manage vehicle and real estate loan portfolios.

Until the completion of this financial statement, transaction costs incurred amount to R$6,533 and were recorded in B3's statement of profit or loss.

Following the conclusion of the above-mentioned transaction, B3 recorded a negative result of R$7,585 due to the equity pickup of Portal de Documentos between the acquisition date and this quarterly information date.

Identifiable net assets acquired and goodwill

The difference between the consideration transferred in exchange for the controlling interest of Portal de Documentos and its net assets at fair value resulted in the recognition of goodwill and intangible and tangible assets.

The allocation of the amount paid was based on a preliminary fair value assessment of the net assets acquired from Portal de Documentos and it is under review by management and independent advisors. B3 expects to complete these studies in the coming months.

The fair value of identifiable assets acquired, and liabilities assumed in the business combination was estimated using the discounted cash flow projection method and replacement cost. Fair value estimates using the discounted cash flow method were based on a discount rate of 15.01%. The portion of unidentifiable net assets of this business combination was allocated as goodwill.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

The allocated purchase price is as follows:

Base Date 06/11/2019 Purchase Price Allocation (100%) a) Purchase price 88,055 Cash payment 38,055 Future installments 50,000

b) Portal de Documentos negative equity (402)

c) Plus (less) value of assets and liabilities 490 Property and equipment 742 Deferred tax liabilities (252)

d) Intangible assets 19,867 Platform (1) 15,345 Non-contractual relationship with clients (1) 14,757 Deferred tax liabilities (10,235) a-b-c-d = Goodwill 68,100

(1) The estimated useful lives of the platform and of non-contractual relationship with customers are 7 and 6.6 years, respectively.

The goodwill of R$68,100 represents the future economic benefit expected from the synergy of the business combination. Currently does not intend to merger Portal de Documentos, therefore, there are no tax deduction estimates. e) Restatement of prior periods

(i) New revenue segmentation

Beginning January 1, 2019, B3 started to adopt a new revenue disclosure structure, improving the way different activities and market dynamics are presented and grouped. This change reflected only in the presentation of revenues, not modifying the types of services provided, amounts charged and accounting practices adopted.

As a result of the adoption of the new revenue presentation structure, for the purpose of comparison of financial statements, management is restating the balances as of December 31, 2018 of Notes “17 - Revenues” and “20 - Segment information”.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

The conciliation between the current and originally stated balances is as follows:

Note 17 – Revenues

2018 Former segmentation

BM&F Segment Bovespa Segment CETIP UTVM Segment CETIP UFIN Segment Other operating income Total Gross revenue B3 Consolidated B3 Consolidated B3 Consolidated B3 Consolidated B3 Consolidated Total B3 Consolidated

Listed segment 1,382,987 1,382,963 1,513,146 1,513,146 - - - - 299,806 299,922 3,195,939 3,196,031

Shares and variable income instruments 148,508 148,508 1,513,124 1,513,124 - - - - 299,806 299,922 1,961,438 1,961,554 Trading and post-trading 148,508 148,508 1,499,779 1,499,779 ------1,648,287 1,648,287

Depositary of variable income ------122,221 122,221 122,221 122,221 Share loan ------116,400 116,400 116,400 116,400

Solutions to issuers - - 13,345 13,345 - - - - 61,185 61,301 74,530 74,646

Interest, currencies and goods 1,234,479 1,234,455 22 22 ------1,234,501 1,234,477

Trading and post-trading 1,234,479 1,234,455 22 22 ------1,234,501 1,234,477

ntation OTC segment 15,123 15,123 374 374 832,022 832,022 - - 122,650 122,650 970,169 970,169

Fixed income instruments - - 374 374 525,295 525,295 - - 122,650 122,650 648,319 648,319

Derivatives 15,123 15,123 - - 158,476 158,476 - - - - 173,599 173,599 Other - - - - 148,251 148,251 - - - - 148,251 148,251

Newsegme

Infrastructure for financing segment ------465,092 501,726 - - 465,092 501,726

Technology, Data and Service

Segment - - 21,017 21,017 385,500 385,500 19,602 24,838 202,720 252,594 628,839 683,949 Technology and access - - - - 366,101 366,101 - - 46,180 46,180 412,281 412,281

Data and analytics - - - - 7,893 7,893 19,186 24,423 124,191 124,191 151,270 156,507 Bank B3 ------36,203 - 36,203

Others - - 21,017 21,017 11,506 11,506 416 415 32,349 46,020 65,288 78,958

Total 1,398,110 1,398,086 1,534,537 1,534,537 1,217,522 1,217,522 484,694 526,564 625,176 675,166 5,260,039 5,351,875

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Note 20 - Segment information

2018

Consolidated Institutional and Related to BM&F Bovespa Corporate Products CETIP UTVM CETIP UFIN combination Segment Segment Segment Segment Segment with CETIP Total Net revenue 1,260,760 1,381,989 603,120 1,093,296 492,750 - 4,831,915 Listed segment 1,260,760 1,363,455 210,514 - - - 2,834,729 OTC segment - - 114,200 747,836 - - 862,036 Infrastructure for financing segment - - 39,583 - 475,617 - 515,200 Technology, Data and Service Segment - 18,534 238,823 345,460 17,133 - 619,950

Adjusted operating expense (258,797) (266,914) (210,488) (170,282) (276,465) (36,998) (1,219,944) Listed segment (258,344) (244,884) (53,078) - - (17,398) (573,704) OTC segment (453) - (42,026) (148,287) - (5,967) (196,733) Infrastructure for financing segment - - (4,431) - (266,629) (8,478) (279,538) Technology, Data and Service Segment - (22,030) (110,953) (21,995) (9,836) (5,155) (169,969)

Long-term incentive (32,929) (33,118) (24,163) (23,844) (10,846) (26,324) (151,224) Listed segment (32,823) (32,105) (9,396) - - (15,665) (89,989) OTC segment (106) - (3,590) (19,260) - (4,837) (27,793) Infrastructure for financing segment - - (2) - (9,578) (2,020) (11,600) Technology, Data and Service Segment - (1,013) (11,175) (4,584) (1,268) (3,802) (21,842)

Other provisions (29,464) (31,516) (15,885) (26,282) (5,829) - (108,976) Listed segment (29,461) (31,409) (5,460) - - - (66,330) OTC segment (3) - (1,460) (15,551) - - (17,014) Infrastructure for financing segment - - (13) - (5,361) - (5,374) Technology, Data and Service Segment - (107) (8,952) (10,731) (468) - (20,258)

Income before depreciation and amortization 939,570 1,050,441 352,584 872,888 199,610 (63,322) 3,351,771

Depreciation and amortization (40,092) (40,153) (25,931) (739,676) (107,253) - (953,105)

Income after depreciation and amortization 899,478 1,010,288 326,653 133,212 92,357 (63,322) 2,398,666

Equity in income of investees 2,147 Financial result (53,682) Income tax and social contribution (250,058) Redução do valor recuperável de ativos (8,722) Net income for the year 2,088,351

(ii) Revenue-linked expenses and expenses related to the business combination with CETIP

In order to continuously improve the information prepared by B3, in 2019, two groups of expenses of the income statement were reclassified. For purposes of comparison of quarterly information, Management is restating the balances at December 31, 2018 of the income statement and statement of value added.

Presentation of revenue-linked expenses

From the presentation of the first quarter of 2019, B3 began to segregate expenses revenue-linked expenses in the income statement, substantially composed of the payment to the Registers for services rendered in the Infrastructure for Financing Segment.

Expenses related to the business combination with CETIP

As a result of the completion of the integration with CETIP, the expenses related to the business combination will no longer be presented in the income statement on a segregated basis. The expenses related to shares granted in 2017, in the context of the business combination with CETIP, are now recognized under “Personnel and related charges”.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

The conciliation between the current and originally stated balances is as follows:

B3 Accumulated Accumulated 2018 Expenses 2018 Reclassification (Restated) General and administrative Personnel and charges (711,709) (26,505) (738,214) Data processing (191,174) 3,917 (187,257) Depreciation and amortization (951,579) - (951,579) Revenue-linked expense - (194,898) (194,898) Third-party services (232,881) 147,356 (85,525) Maintenance in general (18,111) (98) (18,209) Promotion and publicity (29,477) (1,620) (31,097) Taxes and charges (8,192) (419) (8,611) Board and committee members (14,303) - (14,303) Related to busines combination with Cetip (63,322) 63,322 - Sundry expenses (180,433) 8,945 (171,488)

Total (2,401,181) - (2,401,181)

Consolidated Accumulated Accumulated 2018 Expenses 2018 Reclassification (Restated) General and administrative Personnel and charges (727,617) (26,505) (754,122) Data processing (193,914) 3,917 (189,997) Depreciation and amortization (953,105) - (953,105) Revenue-linked expense - (198,212) (198,212) Third-party services (237,339) 150,669 (86,670) Maintenance in general (20,507) (99) (20,606) Promotion and publicity (29,620) (1,620) (31,240) Taxes and charges (9,872) (419) (10,291) Board and committee members (14,303) - (14,303) Related to busines combination with Cetip (63,322) 63,322 - Sundry expenses (183,650) 8,947 (174,703)

Total (2,433,249) - (2,433,249)

3. Summary of significant accounting practices a) Consolidation and investments

Subsidiaries

The consolidated financial statements comprise the financial statements of B3 and its subsidiaries, whose accounting practices are adjusted when necessary to ensure consistency with the practices adopted by B3.

B3 consolidates its subsidiaries from the moment it assumes control thereover, that is, when it is exposed or entitled to variable returns based on its involvement with the investee and has the ability to affect these returns through power exercised.

In the individual financial statements, investments in subsidiaries are accounted for under the equity method and fully consolidated for purposes of presentation of the consolidated financial statements.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Assets, liabilities, revenues and expenses are included in accordance with their nature in the consolidation process, less intercompany transactions. B3 investment is eliminated, recorded against equity of the subsidiaries. Unrealized losses are also eliminated, unless the transactions provides evidence of impairment.

Associates

Investments in associates are recorded using the equity method and are initially recognized at cost. B3’s investment in associates includes goodwill identified on acquisition, net of any accumulated impairment.

B3 applies the equity method to assess investments in companies in which it has significant influence. B3’s judgment as regards the level of influence on investments takes into consideration key factors, such as interest percentage, representation in the Board of Directors, participation in the definition of policies and businesses, and material intercompany transactions. b) Financial instruments

First-time adoption of CPC 48/IFRS 9 – Financial Instruments relating to hedge

B3 adopted CPC 48/IFRS 9 - Financial Instruments for hedge accounting at January 1, 2019 prospectively. The adoption of the respective accounting pronouncement (CPC) enabled B3 to be more efficient in managing risks that could affect its P&L. All existing hedging relationships were qualified for hedge accounting and there were no significant ineffective elements, therefore no rebalancing between hedging instruments and hedged items was required.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

B3 uses derivative financial instruments to hedge its assets and liabilities against market risks, especially those related to foreign currencies.

Derivative financial instruments designated in hedging transactions are initially recognized at fair value on the date in which the derivative agreement is entered into, being subsequently revaluated also at fair value. Derivatives are recorded as financial assets when the financial instrument fair value is positive, and as financial liabilities when fair value is negative.

Any gains or losses from changes in fair value of derivatives over the fiscal year are recorded directly in P&L, except for the effective portion of the cash flow hedge, which is recognized directly in equity under other comprehensive income, and subsequently reclassified to P&L when the hedge item affects P&L.

(i) Classification and measurement

B3 classifies financial assets and liabilities upon initial recognition, according to the business model and contractual flows.

Cash and cash equivalents

B3 considers cash and bank deposits as cash and cash equivalents for purposes of the statement of cash flows.

Amortized cost

Financial assets measured at the amortized cost are non-derivative financial assets designated by the entity in this category and the purpose of the business model adopted is to maintain assets for receipt of contractual cash flows on specific dates (principal and interest). Non-derivative financial liabilities are classified at amortized cost, except where this classification does not result in more appropriate information.

This category includes:

Receivables

B3’s receivables refer substantially to trade accounts receivable. They are initially recorded at the transaction value and subsequently at amortized cost, using the effective interest method, less any impairment loss.

Loans and debentures

Loans and debentures are initially measured at fair value, less transaction costs incurred, and subsequently carried at amortized cost. Any difference between the amount raised (net of transaction costs) and the settlement amount is recognized in the statement of profit or loss for the period in which loans are outstanding, under the effective interest method.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Financial assets measured at fair value through other comprehensive income

Financial assets measured at fair value through other comprehensive income are "non-derivative" financial assets that are designated by the entity in this category, whose purpose according to the business model adopted is to receive the contractual cash flows (principal and interest), and possible disposal of the asset. Interest is calculated using the effective interest rate method, and is recognized in statement of profit or loss as finance income. The portion corresponding to the change in fair value is recognized in the comprehensive income net of taxes, charged against P&L upon settlement or impairment, except for equity instruments.

The option to designate equity instruments as measured at fair value through other comprehensive income is irrevocable. The portion corresponding to the change in fair value recognized in comprehensive income is no longer transferred to P&L upon settlement. Earnings received are recognized in P&L.

Financial assets measured at fair value through profit or loss

Financial assets measured at fair value through profit or loss are financial assets not classified in the previous categories due to the business model adopted, or assets designated by the entity, upon initial recognition. Gains or losses arising from changes in the fair value of these financial instruments are presented in P&L, under finance income (costs), in the period in which they occur.

This category includes:

Guarantees received in operations

These are amounts received from market participants as collateral against default or insolvency. Amounts received in cash are recorded as liabilities and guarantees other than cash are recorded in memorandum accounts. Neither of the guarantees received are subject to interest or any other charges.

(ii) Derivative financial instruments

B3 uses derivative financial instruments to protect its assets and liabilities from market risks, especially related to foreign currencies.

Derivative financial instruments designated in hedging transactions are initially recognized at fair value on the date when the derivative contract is entered into, and are subsequently also revalued at fair value. Derivatives are recorded as financial assets when the fair value of the financial instrument is positive, and as financial liabilities when the fair value is negative.

Any gains or losses from changes in fair value of derivatives over the year are posted to the statement of profit or loss, except for the effective cash flow hedge portion, which is recognized in equity, under “Other comprehensive income (loss)”, and subsequently reclassified to P&L when the hedged item affects P&L.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

(iii) Hedge accounting

Upon entering a hedging transaction, B3 prepares formal documentation containing: (i) hedge objective; (ii) hedge type; (iii) risk management strategy; (iv) nature of hedged risk; (v) identification of hedged item; (vi) identification of hedging instrument; and (vii) prospective effectiveness assessment.

Any imbalance between the hedged item index and the hedging instrument that is not in accordance with the hedge purpose of B3 is adjusted so that the index goes back to the standards established in the hedging strategy.

Fair value hedge

Any gain or loss from changes in the fair value of derivative instruments designated as hedging instruments, as well as hedged assets or liabilities (hedged item) are recognized in financial result, however, if the hedged asset is an equity instrument designated upon initial recognition as measured at fair value through other comprehensive income, the gain or loss on the hedging instrument is recognized in other comprehensive income.

Cash flow hedge

Any gain or loss in the hedging instrument related to the effective hedge portion is recognized under equity, in “other comprehensive income”, net of tax effects. Consequently, the exchange rate variation in hedging instruments, previously recognized in financial result prior to its recognition as a hedging instrument, accumulates in equity and is transferred to P&L for the same period and the same account group under which the hedged transaction is recognized. When the hedged transaction implies recognition of a nonfinancial asset, gains and losses recognized in equity are transferred and included in the initial measurement of the asset cost. The non-effective portion of the hedge is immediately recognized in P&L.

Hedge effectiveness analysis

B3 adopts the dollar offset method for prospective effectiveness test, which takes into consideration the ratio at fair value or present value of accumulated gains or losses in the hedging instrument with gains or losses on hedged item for hedged risk. The approach used for the analyses consists of the benchmark rate approach.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated) c) First-time adoption of IFRS 16/CPC 06 (R2) - Leases

B3 first-time adopted IFRS 16/CPC 06 (R2) - Leases, effective for annual periods beginning on or after January 1, 2019, which replaces IAS 17 - Leases that was effective until the year ended December 31, 2018.

Under the scope of IFRS 16/CPC 06 (R2), B3 decided not to restate comparative information for exercises of 2018, therefore, the information corresponding to leases is not comparable with the information presented for the exercises of the 2019.

B3 recognizes a lease liability to make payments and an asset representing the right to use the underlying asset over the lease term. The interest expenses on the lease liability and the depreciation expense on the right-of-use asset are recognize separately in the income statement. Prior to the adoption of CPC 06 (R2), B3 recognized real estate leases as rental expense in P&L. B3 disregarded the ‘low-value asset” and “short-term” leases.

Lease liability is revalued on the occurrence of events such as change in lease term, change in future lease payments, change in an index or rate used to determine the payments. The revaluation amount of the lease liability is recognized as an adjustment to the right-of-use asset.

Transition to CPC 06 (R2)

The impacts arising from the first-time adoption on financial statements are as follows:

B3 Consolidated Impact on balance sheet 01/01/2019 01/01/2019 Assets 18,190 21,406 Property and equipment (right-of-use assets) 18,190 21,406 Liabilities (19,330) (22,546) Lease liabilities (19,330) (22,546) Net impact on equity 1,140 1,140

Impact on income statement 12/31/2019 12/31/2019 Depreciation included in general and administrative expenses (4,764) (5,193) Operating lease expense excluded from general and administrative expenses 5,452 5,919 Income before financial income and expenses 688 726 Financial expenses (1,108) (1,238) Tax expense (143) (174) Net impact on P&L (563) (686)

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated) d) Business combination

B3 accounts for business combinations using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at the acquisition-date fair value, and the value of any noncontrolling interests in the acquire. Costs directly attributable to the acquisition are accounted for as expenses, as incurred.

B3 measures the assets acquired and the liabilities assumed in order to classify and allocate them according to the contractual terms, economic circumstances and the relevant conditions on the acquisition date.

Any contingent consideration (future installments) to be transferred by B3 is recorded at fair value at acquisition date. Subsequent changes in fair value of future installments considered an asset or a liability, which are not considered adjustments in the measurement period, are recorded in the statement of profit or loss.

Goodwill is initially measured as the transferred payment exceeding amount in relation to the net assets acquired. If the consideration is lower than the fair value of the net assets acquired, the difference will be recognized as a gain in the income statement.

After initial recognition, goodwill is measured at cost, less any accumulated impairment losses. For impairment test purposes, goodwill acquired in a business combination is allocated to each cash- generating units that are expected to benefit from the synergies of combination. e) Prepaid expenses

These are represented by agreements entered into with suppliers deriving from prepayment of various services rendered. Expenses are allocated to the statement of profit or loss over the term of each agreement and to the extent that the services are received. f) Noncurrent assets held for sale

Noncurrent assets are classified as held for sale when their carrying amount is recoverable, especially by means of a sale transaction and when this sale is virtually certain. These assets are measured at the lower of carrying amount and fair value, less costs to sell. g) Intangible assets

Goodwill

Goodwill recorded in intangible assets arises from acquisitions conducted by B3 and is stated at cost less accumulated impairment losses. Impairment losses recognized on goodwill are not reversed.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Contractual relationships

Contractual relationships, acquired in a business combination, are recognized at fair value at the acquisition date. These relationships have finite useful lives and are accounted for at cost less accumulated amortization. Amortization is calculated using the straight-line method over the expected life of the contractual relationship.

Software and projects

Software licenses acquired are capitalized based on incurred costs and amortized over their estimated useful life.

Costs associated with software development or maintenance are expensed as incurred. Expenditures directly associated with the development of identifiable and unique software, controlled by B3 and which will probably generate economic benefits greater than the costs for more than one year, are recognized as intangible assets.

Amortization expense is recognized in P&L unless such expense is included in the carrying amount of another asset. In these cases, amortization of intangible assets used for development activities is included as part of the cost of another intangible asset.

Expenditures for development of software recognized as assets are amortized using the straight-line method over the assets’ useful lives. h) Property and equipment

Property and equipment items are recorded at acquisition, build-up or construction cost, less accumulated depreciation. Depreciation is calculated under the straight-line method and takes into consideration the estimated useful lives of the assets and their residual value. At the end of each period, the residual value and useful life of assets are reviewed and adjusted if necessary.

Subsequent costs are included in the carrying amount of the asset or recognized as a separate asset, as appropriate, only when future economic benefits are likely to flow to the Company and the cost of the item can be reliably measured. All other repair and maintenance costs are matched against P&L, as incurred.

Amortization expense is recognized in P&L unless such expense is included in the carrying amount of another asset. Depreciation of property and equipment items used for development activities is included as part of the cost of an intangible asset. i) Contingent assets and liabilities, and provisions for tax, civil and labor obligations

The recognition, measurement, and disclosure of provisions for tax, civil and labor contingencies, contingent assets and liabilities, and legal obligations comply with the criteria defined in CPC 25/IAS 37.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated) j) Judicial deposits

Judicial deposits are related to legal proceedings of a tax, civil and labor nature, and are monetarily adjusted and presented in noncurrent assets k) Other assets and liabilities

These are stated at their known and realizable/settlement amounts plus, where applicable, related earnings and charges, and monetary variations and/or exchange differences incurred up to the statement of financial position date. l) Impairment of assets

Indefinite-lived assets, such as goodwill, are not subject to amortization and are tested annually for impairment. In case of indication of impairment, they are reassessed in shorter periods. Finite-lived assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Impairment losses are recognized at the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.

For impairment valuation purposes, assets are grouped at the lowest levels for which there are separately identifiable cash flows (Cash Generating Units - CGUs). Non-financial assets other than goodwill that were subject to impairment are reviewed subsequently for possible reversal of the impairment at the reporting date. m) Employee benefits

(i) Pension obligations

B3 maintains a defined contribution retirement plan with voluntary participation open to all employees. B3 has no obligations to make additional payments as a sponsor. The regular contributions are included in personnel costs in the period in which they are due.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

(ii) Share-based incentives

B3 maintains a long-term incentive plan. Until 2014, B3 granted stock options under its Stock Option Plan, reason why there are outstanding shares not yet exercised. From 2015 onwards, B3 started to grant shares under its Stock Grant Plan (Share Plan). The objective is to give employees of B3 and its subsidiaries the opportunity to become B3 shareholders, obtaining a greater alignment between their interests and the shareholders’ interests, as well as allow B3 and its subsidiaries to attract and retain management members and employees. The fair value of options and shares granted is recognized as expense during the vesting period (period during which the specific vesting conditions must be met). At the statement of financial position date, B3 reviews its estimates of the number of options and shares that will vest based on the established conditions. B3 recognizes the impact of any changes to the original estimates, if any, in the statement of profit or loss, against capital reserve in equity. In the case of share-based payment programs that may be settled in cash, the fair value payable to executives is recognized as an expense with the corresponding increase in liabilities, for the period in which the executives acquire the right to payment. The liabilities are remeasured at each statement of financial position date and on the settlement date. Any changes in the fair value of liabilities are recognized as personnel expenses in the statement of profit or loss.

(iii) Profit sharing

B3 offers annual variable compensation, recorded and paid in cash through the Profit Sharing Program. The program defines the target value, based on individual performance indicators, which consider factors specific to each function (job level), area results and B3 overall performance indicators. Provision for profit sharing program is recorded in the statement of profit or loss on an accrual basis. n) Foreign currency translation

Items included in the financial statements for each of the consolidated companies of B3 are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements are presented in Brazilian Reais (R$), which is the functional currency of B3.

Transactions in foreign currency are translated into Brazilian Reais using the exchange rates prevailing on the dates of the transaction or valuation on which the items are remunerated. Exchange gains and losses arising from settlement of these transactions and translation at year-end exchange rates, referring to monetary assets and liabilities in foreign currency, are recognized in the statement of profit or loss, except when deferred in other comprehensive income originating from foreign investment hedge operations.

In the case of exchange gains/losses on foreign investments, whose functional currency differs from that of B3, variations in the investment amount deriving exclusively from exchange differences are recorded under “Equity adjustments” in other comprehensive income and are only written down to P&L for the period when the investment is sold or written off.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated) o) Taxes

B3 is a for-profit business Corporation and, as such, income is subject to certain taxes and contributions.

(i) Current and deferred income and social contribution taxes

Current and deferred income tax of B3, BLK, Portal and Banco B3 is calculated at the rate of 15%, plus a surtax of 10% on taxable profit exceeding R$240 whereas social contribution is calculated at 9% on taxable profit (15% for Banco B3), and take into consideration income and social contribution tax losses to be offset, to the limit of 30% of taxable profit.

Deferred income and social contribution taxes are calculated on income and social contribution tax losses and corresponding temporary differences between the tax base on assets and liabilities and their carrying amounts in the financial statements

Deferred tax assets are recognized to the extent that future taxable profit is likely to be available to offset temporary differences and/or tax losses.

Current income taxes of CETIP Info comprise both income and social contribution taxes. Income tax is calculated at a rate of 15%, plus 10% surtax on taxable profit computed as a percentage of gross revenue (“Lucro presumido”), exceeding R$240 whereas social contribution tax is computed at a rate of 9% on taxable profit computed as a percentage of gross revenue (“Lucro presumido”).

BVRJ is a non-profit entity, therefore exempt from income and social contribution taxes.

(ii) Other taxes

The other taxes charged over trading, clearing and settlement fees, and other services were calculated at the rates of 1.65% for PIS and 7.60% for COFINS, except for the financing segment (UFIN) and advisory, licensing and technical support services, which are calculated at 0.65% (PIS) and 3% (COFINS).

Portal de Documentos calculates PIS and COFINS at the rates of 1.65% and 7.60%, respectively, except for activities subject to the cumulative regime, which are calculated at the rates of 0.65% and 3%, respectively.

Banco B3 calculates PIS and COFINS at the rates of 0.65% and 4%, respectively.

BLK and CETIP Info calculates PIS and COFINS at the rates of 0.65% and 3%, respectively.

B3 and its subsidiaries pay Service Tax (ISS) on services rendered at rates ranging from 2% to 5% depending on the nature of the service.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated) p) Earnings per share

For purposes of disclosure of earnings per share, basic earnings per share are calculated by dividing profit attributable to B3 shareholders by the average number of shares outstanding in the period. Diluted earnings per share are calculated similarly, except that the number of outstanding shares is adjusted to reflect additional shares that would have been outstanding if potentially dilutive shares had been issued for granted stock options in the respective periods. q) Payment of dividends and interest on equity

Dividends and interest on equity paid to B3 shareholders are recognized as a liability in the financial statements at the dates of approved by the Board of Directors, based on B3’s Articles of Incorporation. The tax benefit over interest on equity is recorded in the statement of profit or loss. r) Information by segment

Operating segments are presented in a manner consistent with the internal reports provided to the Executive Board, which is responsible for making B3’s main operational decisions and implementing the strategies defined by the Board of Directors. s) Current and noncurrent assets and liabilities

Assets and liabilities are classified as current whenever their realization or settlement is deemed to occur within the following twelve months (or another term that follows the normal cycle of B3). Otherwise they are stated as noncurrent. t) Significant accounting estimates and judgments

The preparation of financial statements requires the use of certain critical accounting estimates as well as the exercise of judgment in the process of applying B3's accounting policies. Those more complex areas that require a higher level of judgment, as well as the areas in which assumptions and estimates are significant to the consolidated financial statements are the following:

• Equity pickup – Note 6(a) • Impairment of assets – Notes 7 and 8 • Classification and fair value calculation of financial instruments – Note 4 • Incentive based on equity instruments – Notes 15(a), (b) and (c) • Provision for tax, civil and labor contingencies, contingent assets and liabilities – Note 11 • Estimated useful life of property and equipment and intangible assets – Notes 7 and 8 • Future installments– Note 3(e) and 10

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

4. Cash and cash equivalents, financial investments and derivative financial instruments a) Cash and cash equivalents

B3 Consolidated Description 2019 2018 2019 2018

Cash and banks – deposits in local currency 28,265 21,078 332 868 Bank checking account in foreign currency 109,615 62,047 239,647 120,132 Cash and cash equivalents 137,880 83,125 239,979 121,000 Bank deposits in foreign currency - Third- party funds (1) 254,054 208,687 254,054 208,687 Total cash and cash equivalents 391,934 291,812 494,033 329,687

(1) Refers to the restricted resources of third parties linked to the full settlement of derivative transactions (Clearing BM&FBOVESPA) and exchange transactions (Clearing Exchange).

Cash and cash equivalents are held with Brazilian or foreign financial institutions subject to low credit risk. Deposits in foreign currency are mostly in US dollars.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated) b) Financial investments

The breakdown of financial investments by category, nature and maturity is as follows:

B3 Above 3 months and Above 12 No up to 12 months and Over 5 Description maturity months up to 5 years years 2019 2018

Financial assets measured at fair value through profit or loss Financial investment fund (1) 7,354,480 - - - 7,354,480 5,046,487 Federal government securities Financial Treasury Bills (LFT) - - 105 - 105 99 Other investments (3) 20,459 - - - 20,459 17,002 7,374,939 - 105 - 7,375,044 5,063,588

Financial assets measured at fair value through other comprehensive income Federal government securities Financial Treasury Bills (LFT) - 139,137 1,347,714 191,047 1,677,898 1,585,986 National Treasury Bills (LTN) - - 112,962 - 112,962 160,400 National Treasury Notes (NTN) - - 215,156 - 215,156 138,425 Shares - Minority interest (4) 370,313 - - - 370,313 344,162 370,313 139,137 1,675,832 191,047 2,376,329 2,228,973

Financial assets measured at amortized cost Federal government securities National Treasury Notes (NTN) (5) - - 64,594 - 64,594 - - - 64,594 - 64,594 -

Total 7,745,252 139,137 1,740,531 191,047 9,815,967 7,292,561

Current 7,884,389 5,639,356 Noncurrent 1,931,578 1,653,205

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Consolidated Above 3 Above 12 months months No Up to 3 and up to and up to Over 5 Description maturity months 12 months 5 years years 2019 2018

Financial assets measured at fair value through profit or loss Financial investment fund (4) 2,549,925 - - - - 2,549,925 1,659,851 Repurchase agreements (2) - 1,600,619 - - - 1,600,619 2,012,632 Federal government securities Financial Treasury Bills (LFT) - 25,378 63,730 3,012,547 822,713 3,924,368 2,216,231 Other investments (3) 20,463 - - - - 20,463 18,503 2,570,388 1,625,997 63,730 3,012,547 822,713 8,095,375 5,907,217

Financial assets measured at fair value through other comprehensive income Federal government securities Financial Treasury Bills (LFT) - 150,088 23,652 1,414,406 197,867 1,786,013 1,683,481 National Treasury Bills (LTN) - - - 112,963 - 112,963 160,400 National Treasury Notes (NTN) - - 35 215,156 19 215,210 138,474 Other investments (3) 25,080 - - - - 25,080 9,046 Shares - Minority interest (4) 370,313 - - - - 370,313 344,162 395,393 150,088 23,687 1,742,525 197,886 2,509,579 2,335,563 Financial assets measured at amortized cost Federal government securities National Treasury Notes (NTN) (5) - - - 64,594 - 64,594 - - - - 64,594 - 64,594 -

Total 2,965,781 1,776,085 87,417 4,819,666 1,020,599 10,669,548 8,242,780

Current 8,631,578 6,487,587 Noncurrent 2,037,970 1,755,193

(1) Investment Investment funds mostly comprise investments in federal government bonds and operations subject to repurchase agreements backed by government bonds indexed by reference to the Central Bank Benchmark Rate (SELIC). In the consolidated financial statements, exclusive investment funds are distributed in accordance with the financial instrument and maturity and are, however, recorded in current assets. Equity of investment funds is as follows:

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

B3 Consolidated Administrator 2019 2018 2019 2018

Exclusive investment funds included in the consolidation process Bradesco FI RF LP Eucalipto Banco Bradesco S.A. 3,098,018 2,417,398 - - Imbuia FI RF DI Safra Adm. Fiduciária Ltda 804,695 488,024 - - BB Pau Brasil FI RF BB DTVM S.A. 949,849 505,614 - - 4,852,562 3,411,036 - - Mutual investment funds Bradesco Empresas FIC FI DI Federal Banco Bradesco S.A. 11,001 13,773 11,056 13,874 Araucária RF FI Itaú Unibanco S.A. 638,722 330,258 655,398 333,693 Santander FI Cedro RF Banco Santander S.A. 788,943 525,635 820,219 546,500 Jacarandá RF Votorantim DTVM Ltda 391,682 126,487 391,682 126,487 FI Liquidez Câmara BM&FBOVESPA Banco B3 S.A. 671,570 639,298 671,570 639,297 2,501,918 1,635,451 2,549,925 1,659,851 Total 7,354,480 5,046,487 2,549,925 1,659,851

(2) Obtained from banks with low credit risk and backed by federal government securities.

(3) Investments in gold and funds through foreign subsidiary.

(4) These refer to shares of Bolsa de Comercio de Santiago in the amount of R$64,623 (R$81,265 at December 31, 2018); Bolsa Mexicana de Valores - R$212,343 (R$158,963 at December 31, 2018); Bolsa de Valores de Colômbia - R$52,709 (R$52,885 at December 31, 2018) and Bolsa de Valores de Lima - R$40,638 (R$51,049 at December 31, 2018) acquired by B3 within its strategy to explore opportunities of partnerships with other stock exchanges.

(5) National Treasury Notes assigned for use according to agreement between B3 and Associação BM&F (Note 13 (a)).

The government securities are held under the custody of the Special System for Settlement and Custody (SELIC); the investment fund shares are held under the custody of their respective administrators; local shares are held under the custody of B3’s Clearinghouse; the shares of Bolsa de Comercio de Santiago, Bolsa Mexicana de Valores, Bolsa de Valores de Lima and Bolsa de Valores de Colombia are held under the custody of BTG Pactual Chile, Mexico, Peru and Colômbia, respectively.

The positions of financial assets as well any impairment risks to which these assets are exposed are periodically monitored. In the case of impairment or subsequent recovery of amounts previously written off, these adjustments are recorded in P&L for the period. Considering the nature of these assets, B3 recorded no historical impairment losses.

Marketable securities were not reclassified in the year.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated) c) Derivative financial instruments

Fair value hierarchy

Financial assets and liabilities measured at fair value of B3 are recognized at quoted prices (unadjusted) in active market (Level 1), except for derivative financial instruments together with the principal of the debt issued abroad due to hedge accounting, which are classified under Level 2. Amounts receivable and trade accounts payable approximate book value due to their short-term maturity and fair value of transactions with related parties corresponds to book value.

Derivative financial instruments

B3 conducts operations involving derivative financial instruments aimed solely as hedge against market risks such as currency fluctuation and share B3SA3 price variation. B3's exposure to the risk of price fluctuation is related to payment of labor charges arising from the long-term incentive program (“ILP”). Hedge accounting is applied to all derivatives contracted.

Investment in foreign subsidiary (CETIP Lux)

B3 Consolidated Assets Investment in foreign subsidiary 1,393,801 -

Liabilities Intercompany loans and loan taken out by subsidiary (1,902,517) (606,589) Net currency exposure (508,716) (606,589)

In view of the fact that, under the terms of tax legislation, gains or losses arising from the exchange rate variation on investments should not be taken into account in the income and social contribution tax base, a mismatch between long and short positions in foreign currency is required, so that the after-tax P&L is not exposed to exchange rate variation (post-tax hedge).

Cash flow and fair value hedge

At December 31, 2019, the swap consolidated amounts measured at fair value are the following:

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

B3 and Consolidated Fair Value Gain/(Loss) for the year

Financial Hedge Hedging Notional Nonfinancil Operating income classification Hedged Item instrument Notional value value - R$ Maturity Assets Liabilities assets expenses (expenses) Equity

Interest Assets USD 19,800 - Cash Flow installmentes – Swap 01/16/2020 10,814 - - - 7,240 (6,380) Liabilities BRL 65,722 CDI -3.24% foreign debt (1)

Interest Assets USD 19,800 - Cash Flow installmentes – Swap 07/16/2020 10,728 - - - (1,274) 2,037 Liabilities BRL 65,756 CDI -3.38% foreign debt (1)

B3SA3 + Stock Grant Assets Jan/2020 to Cash Flow Swap BRL 112,613 earnings 40,899 - - 23,202 (1,565) 7,346 Charges (2) Liabilities Apr/2020 107% of CDI

- Assets USD 350,000 Fair Value Foreign debt (3) Swap 67.22% of 07/16/2020 142,195 - - - 14,797 - Liabilities BRL 1,108,940 CDI

Assets USD 262,000 - Fair Value Foreign debt (3) Swap 07/16/2020 139,118 - - - 13,722 - Liabilities BRL 870,836 CDI -3.36%

Bolsa Mexicana Cash Flow de Valores NDF MXN 850,000 123,618 03/04/2020 1,668 - - - - 1,101 Shares (4)

Bolsa de

Comércio de Cash Flow NDF CLP 10,000,000 67,531 03/04/2020 - (794) - - - (524) Santiago

Shares (4)

Cash in Certain firm Cash Flow foreign No maturity - - 82 338 - - commitments (5) currency 345,422 (794) 82 23,540 32,920 3,580

Current 345,422 (794)

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

In this period, hedge had no significant element of inefficiency.

(1) In September 2017 and March 2018, B3 took out from mostly low credit risk financial institutions with low credit risk swap transactions, in order to hedge the investment, the installment of half- yearly interest of Senior Unsecured Notes (Note 9), from currency risk.

(2) In January 2019, B3 engaged in a new hedge transaction due to its exposure to price variation of B3SA3 shares, in order to neutralize the impacts of share price variation in paying labor charges on long-term incentive plans.

(3) In March 2018, B3 took out from top-tier financial institutions forward swap transactions to promote the rollover of the hedge relating to the principal of the Senior Unsecured Notes.

(4) In December 2019, B3 took out from mostly low credit risk financial institutions a non-Deliverable Forward (NDF) in order to hedge the investment in the shares of Bolsa Mexicana de Valores and shares of Santiago Stock Exchange from exchange rate variation.

The hedging accounts for approximately 85% of the Mexican peso position referring to the Mexican Stock Exchange shares and approximately 83% of the Chilean peso position referring to the Bolsa de Mexicana de Santiago.

(5) In February 2019, B3 recorded a new hedge, allocating part of its cash in foreign currency to hedge the currency risk of certain firm commitments assumed in foreign currencies (cash flow hedge). The cash flows subject to coverage refer to payments to be incurred up to December 31, 2019, regardless of whether the contract terms exceed that date.

The method to determine the fair value, used by B3, consist in determining the future amount based on the conditions of transactions taken out, and then the present value based on current market curves, as disclosed by B3. d) Financial instruments and risk management

Financial risk management and financial investment policy

B3’s short-term investment policy focuses on high liquidity and low risk, which mostly results in allocations to federal government bonds indexed at SELIC and acquired directly, via repurchase agreements backed by government securities and also through exclusive and non-exclusive funds.

Derivative instrument transactions are performed by B3 exclusively for hedging purposes.

Acquisition or disposal of investments in shares of Latin America Stock Exchanges, are assessed individually and realized only in accordance with the strategic planning approved by the Board of Directors.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

In addition, B3 has a Corporate Risk Management Policy, whose purpose is to establish principles, guidelines and responsibilities to be observed in the risk management process, so as to allow identification, assessment, treatment, monitoring and communication of operational, technological, market, liquidity, credit, image and socio-environmental risks.

The Risk and Financial Committees assess market, liquidity, credit and systemic risks of the markets managed by B3, with a strategic and structural focus.

Sensitivity analysis

The table below presents the consolidated net exposure of all financial instruments (assets and liabilities) by market risk factors. At December 31, 2019, significant market risk is represented by the fall in the floating interest rate (CDI/SELIC).

Exposure to Risk Factors (Consolidated) 2019 2018 Risk fator Risk Percentage Amount Percentage Amount Floating interest rate Lower SELIC rate 66.73% 9,307,882 67.39% 5,559,562 Floating interest rate Higher CDI 24.54% 3,423,866 17.88% 1,474,750 Foreign exchange – Other Lower currency 2.70% 376,127 1.83% 150,742

Share price Lower price 2.66% 370,313 4.17% 344,174 Fixed interest rate Higher fixed rate 2.41% 336,516 0.19% 15,879 Inflation Lower inflation rate 0.58% 80,602 1,68% 138,475 Gold Lower currency 0.23% 31,419 4.92% 405,468 Foreign exchange - USD Lower gold price 0.15% 20,421 1.94% 160,400

The ownership structure at Latin America Stock Exchanges is subject to two risk factors simultaneously: currency and share price.

Share price risk

This risk arises from the possibility of fluctuations in the prices of the shares in Latin America Stock Exchanges, which B3 holds in its portfolio and that may affect the amounts involved.

The table below shows a sensitivity analysis on possible impacts from a variation of 25% and 50% on the probable scenario for share price, for the next three months, obtained from Bloomberg.

Impact Probable Risk factor -50% -25% scenario +25% +50% Bolsa de Comercio de Santiago shares in BRL (32,138) (15,895) 347 16,590 32,832 Share price in CLP 1,211.22 1,816.83 2,422.44 3,028.05 3,633.66 Bolsa de Mexicana de Valores shares in BRL (103,937) (49,734) 4,469 58,672 112,875 Share price in MXN 21.11 31.66 42.21 52.76 63.32 Bolsa de Valores da Colombia shares in BRL (25,542) (11,958) 1,626 15,210 28,794 Share price in COP 5,978.93 8,968.39 11,957.85 14,947.31 17,936.78 Bolsa de Valores de Lima shares in BRL (20,491) (10,418) (345) 9,729 19,802 Share price in PEN 1.11 1.67 2.22 2.78 3.33

The possible impacts shown by the sensitivity analysis would affect equity, net of taxes.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Interest rate risk

This risk arises from the possibility of B3 incur losses due to fluctuations in interest rates, affecting its assets and liabilities, resulting in effects on its Financial result.

• Floating-rate position

As a financial investment policy and considering the need for immediate liquidity with the least possible impact from interest rate fluctuations, B3 maintains its financial assets and liabilities substantially indexed to floating interest rates.

The table below shows a sensitivity analysis on possible impacts on assets and liabilities of a variation of 25% and 50% on the probable scenario for the CDI and Selic rate for the next three months, obtained from Bloomberg.

Impact Probable Risk factor -50% -25% scenario +25% +50% CDI (18,446) (27,559) (36,601) (45,572) (54,474) CDI rate 2.17% 3.26% 4.35% 5.43% 6.52% SELIC 48,663 72,704 96,556 120,223 143,707 SELIC rate 2.17% 3.26% 4.35% 5.43% 6.52%

• Fixed-rate position

B3 has exposure in fixed rates in a small part of its financial investments and securities. However, in terms of percentage, their effects on the portfolio are not considered material.

Currency risk

Currency risk refers to variations in foreign exchange rates that may cause unexpected losses to B3.

In addition to the amounts payable and receivable in foreign currencies, including interest payments on the senior unsecured notes in the next six-month period, B3 has own funds abroad, and also shareholding interest in Latin America Stock Exchanges.

The table below shows a sensitivity analysis on possible impacts on assets and liabilities of a variation of 25% and 50% on the probable scenario for currency risk for the next three months, obtained from Bloomberg.

The possible impacts shown by the sensitivity analysis would substantially affect equity, net of taxes.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Impact Probable Risk factor -50% -25% scenario +25% +50% USD (317,653) (157,878) 1,897 161,672 321,447 Exchange rate USD/BRL 2.0214 3.0320 4.0427 5.0534 6.0641 EUR (2,803) (1,348) 107 1,563 3,018 Exchange rate EUR/BRL 2.3079 3.4618 4.6157 5.7696 6.9236 GBP (1) (0) 0 1 2 Exchange rate GBP/BRL 2.6891 4.0337 5.3782 6.7228 8.0673 CLP (32,257) (16,074) 108 16,291 32,474 Exchange rate CLP/BRL 0.0027 0.0040 0.0054 0.0067 0.0081 MXN (107,495) (55,071) (2,647) 49,777 102,202 Exchange rate MXN/BRL 0.1054 0.1581 0.2107 0.2634 0.3161 COP (26,462) (13,338) (214) 12,909 26,033 Exchange rate COP/BRL 0.0006 0.0009 0.0012 0.0015 0.0018 PEN (20,352) (10,208) (65) 10,078 20,221 Exchange rate PEN/BRL 0.6070 0.9105 1.2140 1.5176 1.8211

In view of the net amounts of other currencies, their impacts are not deemed material.

Liquidity risk

Liquidity risk arises from the cash need related to the obligations assumed. B3 manages its cash flows in order to ensure liquidity and compliance with all Company obligations. The following table shows the main liability financial instruments of B3 by maturity (undiscounted cash flows):

No Within 1 From 1 to From 2 and Above 5

maturity year 2 years 5 years years Collaterals for transactions 3,013,447 - - - - Debt issued abroad - 2,626,404 - - - Swap (1) - (338,390) - - - NDFs (2) - 1,027 - - - Debentures - 53,709 53,495 1,279,919 - Loan in dollars - 104,440 1,769 53,157 - FINEP loan - 3,473 2,619 6,918 3,383 3,013,447 2,450,663 57,883 1,339,994 3,383

(1) For the adjustment calculation, CDI curve was used from December 31, 2019 up to the swap settlement date, the dollar at the closing of month (PTAX) was also used, rate disclosed by the Central Bank of Brazil.

(2) NDFs take into consideration the amount to be settled on contracted transactions. For calculating the adjustment, the sales rates of the respective currencies were disclosed by the Central Bank of Brazil on the last business day of the month.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Credit risk

The main credit risk of B3 arises from its financial investments. As a way of managing this risk, B3 has a financial investment policy that focuses mainly on investments in Brazilian federal government securities. Currently approximately 99% of financial investments is in connection with federal government securities with ratings set by Standard & Poor's and Moody's of “BB-” and “Ba2”, respectively, for long-term issues in local currency. The counterparties of Swaps and NDFs taken out as hedging transactions are substantially low credit risk banks.

Capital management

B3’s objectives in managing its capital are to safeguard its ability to continue as a going concern in order to provide return for its shareholders and for other stakeholders, as well as to maintain an optimal target capital structure. In order to maintain or adjust its capital structure, B3 may revise its practices for payment of dividends, return capital to shareholders, raise loans and issue marketable securities in the financial and capital markets, among others.

At December 31, 2019, the difference between financial assets and liabilities amounted to R$4,060,318, as follows:

Consolidated 2019 2018 Cash and cash equivalents/financial investments 11,163,581 8,572,467 Loans and financing, debentures and derivative financial instruments (4,019,919) (4,234,423) Collateral for transactions (3,013,447) (2,110,933) Earnings and rights on securities under custody (69,897) (59,850) 4,060,318 2,167,261

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

5. Trade accounts receivable

Breakdown of accounts receivable is as follows:

B3 Consolidated Description 2019 2018 2019 2018 Fees 40,500 30,439 40,500 30,439 Trust and custodian fees 147,316 134,553 147,316 134,553 Vendors - Signal broadcasting 27,904 26,930 33,586 31,747 Database management 49,195 33,869 49,195 33,869 Data processing 31,649 42,732 31,649 42,732 Other accounts receivable 39,877 55,653 42,688 56,280

Subtotal 336,441 324,176 344,934 329,620

Estimated losses on accounts receivable (5,529) (5,798) (5,614) (5,798) Total 330,912 318,378 339,320 323,822

The amounts presented above are primarily denominated in Brazilian Reais and approximately 90% falls due within 90 days. At December 31, 2019, the amounts overdue above 90 days totaled R$3,025 (R$3,465 at December 31, 2018) at B3 and in the consolidated.

Changes in estimated losses on accounts receivable:

B3 Consolidated

Balance at December 31, 2017 2,332 2,332 Additions 4,715 4,715 Reversals (862) (862) Write-offs (387) (387) Balance at December 31, 2018 5,798 5,798 Additions 15,129 15,124 Reversals (14,485) (14,485) Write-offs (913) (913) Balance at December 31, 2019 5,529 5,614

6. Investments a) Investments in subsidiaries and associates

Investments in subsidiaries and associates comprise the following:

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Subsidiaries Associate BM&F Banco (USA) UK B3 CETIP CETIP Portal de B3 BVRJ Inc. Ltd. Inova Info Lux BLK Documentos RTM (1) Total

Investment Informations Total shares 24,000 115 - 1,000 1 800 85,000 403,650 200,000 2,020,000 % - Interest held 100.00 86.95 - 100.00 100.00 100.00 100.00 75.00 100.00 20.00 Equity 100,316 87,897 - 2,237 25,080 99,120 1,393,801 2,175 10,144 69,254 Appreciation in business combination ------12,903 86,182 8,809 Adjusted P&L 16,727 1,865 - 307 (1,143) 40,812 89,659 (4,824) (7,585) 15,027

Key financial information Assets 744,134 93,171 - 3,000 25,081 101,953 2,012,267 6,534 25,140 85,845 Liabilities 643,817 5,273 - 763 - 2,833 618,466 4,359 14,996 17,313 Revenues 45,913 6,159 - 2,861 867 50,839 - 7,824 18,572 95,343

Changes in Investments Balances at December 31, 2017 88,524 68,759 1,273 1,616 9 89,607 1,081,347 - - 17,363 1,348,498 Equity in income of investees 11,627 6,046 (295) (48) (1,186) 34,475 222,795 - - 2,147 275,561 Comprehensive income of subsidiary (17) ------(17) Translation adjustments of subsidiary - - (650) 198 729 - - - - - 277 Close down of subsidiary - - (328) ------(328) Capital Increase - - - - 9,494 - - - - - 9,494 Earnings (5,900) - - - - (31,299) - - - - (37,199) Balances at December 31, 2018 94,234 74,805 - 1,766 9,046 92,783 1,304,142 - - 19,510 1,596,286 Equity in income of investees 16,727 1,622 - 307 (1,143) 40,812 89,659 (3,618) (7,585) 3,150 139,931 Comprehensive income of subsidiary 1 ------1 Translation adjustments of subsidiary - - - 164 538 - - - - - 702 Previous year adjustment of subsidiary ------44 - - 44 Acquisition of subsidiary (Note 2(d)) ------13,395 38,055 - 51,450 Future installments (Nota 2(d)(ii)) ------50,000 - 50,000 Capital Increase - - - - 16,639 - - 3,750 13,000 - 33,389 Earnings (10,646) - - - - (34,475) - - - - (45,121) Recognition of stock grant plan ------964 2,856 - 3,820 Balances at December 31, 2019 100,316 76,427 - 2,237 25,080 99,120 1,393,801 14,535 96,326 22,660 1,830,502

(1) B3 holds 20% interest in associate RTM, which is a private communication network created especially for the financial sector, connecting approximately 500 institutions and 25 information and service providers in a single operational environment, RTM manages data, voice and image services and develops specific solutions for users in the financial sector.

The BRV LLC stated no balance in the exercises.

b) Investment properties

This category comprises properties owned by subsidiary BVRJ for rent, which are carried at cost and depreciated at the rate of 4% p.a. There were no additions or write-offs for the period, and depreciation totaled R$1,518 (R$1,518 at December 31, 2018). Rental income from these properties for the period ended December 31, 2019 amounted to R$5,674 (R$5,911 at December 31, 2018).

At December 31, 2019, cost less accumulated depreciation of these proprieties amounted to R$24,563 (R$26,081 at December 31, 2018) and fair value estimated is R$107,192 calculated considering the average square-meter price for sale of commercial properties in the city of Rio de Janeiro, as disclosed in FIPEZAP table.

B3 has no restrictions as to the sale of its investment properties.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

7. Property and equipment

B3 Computer Furniture devices and Construction Changes Buildings and fixtures equipment Facilities Other in progress Total

Balances at December 31, 2017 293,757 21,831 188,524 29,648 26,705 10,623 571,088 Additions 26,027 3,832 92,589 7,618 5,365 7,760 143,191 Write-offs - (242) (1,189) - (250) - (1,681) Reclassification (Note 8) - - 2,010 - - - 2,010 Assets available to sell (19,297) - - (47) - - (19,344) Expenses with recapitalized depreciation - (3) (289) (6) - - (298) Depreciation (12,113) (3,787) (45,734) (5,435) (2,299) - (69,368) Balances at December 31, 2018 288,374 21,631 235,911 31,778 29,521 18,383 625,598

Additions 4,376 4,864 61,630 23,677 8,304 36,260 139,111 Adoption of IFRS 16/CPC 06(R2) 18,190 - - - - - 18,190 Write-offs (138) (66) (313) (215) (313) - (1,045) Transfers 13,430 87 375 15 3 (13,910) - Reclassification (Note 8) - - 1,373 - - - 1,373 Expenses with recapitalized depreciation - (2) (947) - - - (949) Depreciation (30,665) (5,807) (54,073) (7,514) (4,339) - (102,398) Balances at December 31, 2019 293,567 20,707 243,956 47,741 33,176 40,733 679,880

At December 31, 2019 Cost 471,963 66,001 644,308 94,801 82,531 40,733 1,400,337 Accumulated depreciation (178,396) (45,294) (400,352) (47,060) (49,355) - (720,457) Net book balance 293,567 20,707 243,956 47,741 33,176 40,733 679,880 Annual average depreciation rates 2019 6.4% 13.7% 13.6% 9.7% 11.4%

At December 31, 2018 Cost 436,104 61,727 605,825 71,368 75,117 18,383 1,268,524 Accumulated depreciation (147,730) (40,096) (369,914) (39,590) (45,596) - (642,926) Net book balance 288,374 21,631 235,911 31,778 29,521 18,383 625,598 Annual average depreciation rates 2018 8.2% 9.5% 13.4% 10.3% 8.4%

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Consolidated Computer Furniture devices and Construction Changes Buildings and fixtures equipment Facilities Other in progress Total

Balances at December 31, 2017 293,757 21,831 188,524 29,680 29,254 10,623 573,669 Additions 26,027 3,832 92,600 7,618 5,375 7,760 143,212 Write-offs - (242) (1,200) - (1,106) - (2,548) Reclassification (Note 8) - - 2,010 - - - 2,010 Assets available to sell (19,297) - - (47) - - (19,344) Expenses with recapitalized depreciation - (3) (289) (6) - - (298) Depreciation (12,113) (3,787) (45,734) (5,443) (2,299) - (69,376)

Balances at December 31, 2018 288,374 21,631 235,911 31,802 31,224 18,383 627,325

Additions 4,376 4,934 62,715 23,677 8,304 36,260 140,266 Adoption of IFRS 16/CPC 06(R2) 21,406 - - - - - 21,406 Write-offs (138) (69) (324) (215) (308) - (1,054) Transfers 13,430 87 375 15 3 (13,910) - Reclassification (Note 8) - - 1,373 - - - 1,373 Expenses with recapitalized depreciation - (2) (947) - - - (949) Depreciation (31,094) (5,912) (54,887) (7,535) (4,389) - (103,817) Acquisition of subsidiaries - 694 4,432 65 112 - 5,303

Balances at December 31, 2019 296,354 21,363 248,648 47,809 34,946 40,733 689,853

At December 31, 2019 Cost 475,178 67,990 656,696 96,089 84,487 40,733 1,421,173 Accumulated depreciation (178,824) (46,627) (408,048) (48,280) (49,541) - (731,320) Net book balance 296,354 21,363 248,648 47,809 34,946 40,733 689,853 Annual average depreciation rates 2019 6.4% 13.7% 13.6% 9.7% 11.4%

At December 31, 2018 Cost 436,104 61,727 605,928 72,419 76,820 18,383 1,271,381 Accumulated depreciation (147,730) (40,096) (370,017) (40,617) (45,596) - (644,056) Net book balance 288,374 21,631 235,911 31,802 31,224 18,383 627,325 Annual average depreciation rates 2018 8.2% 9.5% 13.4% 10.3% 8.4%

B3 has no restrictions on its properties, except on those pledged as securities for legal claims, recorded for some R$83,100 (R$91,156 at December 31, 2018).

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

8. Intangible assets B3 Cost of Software software internally development generated internally – projects Contractual Changes Goodwill (1) generated completed Software relations Trademarks Total

Balances at December 31, 2017 22,338,876 89,635 5,198,304 75,128 44,439 145,239 27,891,621 Additions - 106,018 342 20,316 - - 126,676 Transfers - (33,344) 5,196 28,148 - - - Reclassification (Note 7) - - (2,010) - - - (2,010) Recapitalization of amortization - - - (210) - (210) Amortization - - (787,731) (26,512) (9,872) (58,096) (882,211) Other (77) 506 (250) - (15) - 164 Balances at December 31, 2018 22,338,799 162,815 4,413,851 96,870 34,552 87,143 27,134,030 Additions - 110,586 - 44,469 - - 155,055 Write-offs - - - (11) - - (11) Transfers - (34,982) 30,998 3,984 - - - Reclassification (Note 7) - - - (1,373) - - (1,373) Amortization - - (819,126) (21,874) (9,872) (69,715) (920,587) Other - 1,078 42 (128) - - 992 Balances at December 31, 2019 22,338,799 239,497 3,625,765 121,937 24,680 17,428 26,368,106

At December 31, 2019 Cost 22,338,799 239,497 6,103,864 580,605 54,222 190,130 29,507,117 Accumulated amortization - - (2,478,099) (458,668) (29,542) (172,702) (3,139,011) Net book balance 22,338,799 239,497 3,625,765 121,937 24,680 17,428 26,368,106 Annual average amortization rates - - 13.6% 12.9% 18.2% 36.7%

At December 31, 2018 Cost 22,338,799 162,815 6,072,825 536,201 54,222 190,130 29,354,992 Accumulated amortization - - (1,658,974) (439,331) (19,670) (102,987) (2,220,962) Net book balance 22,338,799 162,815 4,413,851 96,870 34,552 87,143 27,134,030 Annual average amortization rates - - 12.9% 11.5% 18.2% 30.6%

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Consolidated Cost of Software software internally development generated internally – projects Contractual Changes Goodwill (1) generated completed Software relations Trademarks Total

Balances at December 31, 2017 22,338,876 89,635 5,198,304 75,128 44,439 145,241 27,891,623 Additions - 106,990 342 20,316 - - 127,648 Transfers - (33,344) 5,196 28,148 - - - Reclassification (Note 7) - - (2,010) - - - (2,010) Recapitalization of amortization - - - (210) - (210) Amortization - - (787,731) (26,512) (9,872) (58,096) (882,211) Other (77) 506 (250) - (15) - 164 Balances at December 31, 2018 22,338,799 163,787 4,413,851 96,870 34,552 87,145 27,135,004 Additions - 110,586 801 45,936 - 2 157,325 Write-offs - - - (33) - - (33) Transfers - (35,954) 31,301 4,653 - - - Reclassification (Note 7) - - - (1,373) - - (1,373) Amortization - - (821,316) (23,367) (10,517) (69,715) (924,915) Acquisition of subsidiaries 77,351 - 24,797 3,638 14,757 7 120,550 Other - 1,077 42 (128) - - 991 Balances at December 31, 2019 22,416,150 239,496 3,649,476 126,196 38,792 17,439 26,487,549

At December 31, 2019 Cost 22,416,150 239,496 6,129,766 590,811 68,978 190,141 29,635,342 Accumulated amortization - - (2,480,290) (464,615) (30,186) (172,702) (3,147,793) Net book balance 22,416,150 239,496 3,649,476 126,196 38,792 17,439 26,487,549 Annual average amortization rates - - 13.6% 12.9% 18.2% 36.7%

At December 31, 2018 Cost 22,338,799 163,787 6,072,825 536,201 54,222 190,132 29,355,966 Accumulated amortization - - (1,658,974) (439,331) (19,670) (102,987) (2,220,962) Net book balance 22,338,799 163,787 4,413,851 96,870 34,552 87,145 27,135,004 Annual average amortization rates - - 12.9% 11.5% 18.2% 30.6%

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

(1) Goodwill

As of December 31, 2019, the main variables of the future cash flow projections of the cash-generating units Bovespa Holding and CETIP (UTVM and UFIN) were reviewed, and no need to adjust the goodwill amounts was identified.

B3's new revenue segmentation in 2019 did not change the criteria for allocating goodwill of Bovespa and CETIP (UTVM and UFIN).

On the same reporting date, the future cash flow projections of companies Portal de Documentos and BLK (acquired in 2019) were also evaluated and no need to adjust the goodwill amounts was identified.

All assumptions for the projected cash flow period were based on the most recent budget, performance analysis, market expectations and management strategies.

Consolidated Goodwill book value Discount rate Discount rate Projective period 12/31/2018 (before taxes) (after taxes) (years) Perpetuity Bovespa Holding 14,401,628 16.0% 13.8% 10 6.4% CETIP (UTVM and UFIN) 7,937,171 De 14.5% a 14.4% De 12.4% a 12.6% 5 22,338,799 Consolidated Goodwill book value Discount rate Discount rate Projective period 12/31/2019 (before taxes) (after taxes) (years) Perpetuity Bovespa Holding 14,401,628 15.2% 12.7% 10 CETIP (UTVM e UFIN) 7,937,171 De 13.5% a 13.8% De 11.4% a 11.8% 5 6.1% Other 77,351 De 13.3% a 15.0% De 11.2% a 12.6% 5 22,416,150 (*) Portal de Documentos and BLK.

Management carried out sensitivity analyzes to determine the impacts of changes in the three main variables that affect the calculated value in use:

a. Discount rate: weighted average cost of capital for each unit. Increase sensitivity of 100bps; b. Perpetuity: rate equivalent to nominal GDP in the long run. Decrease sensitivity of 50bps; c. Revenue growth: average annual revenue growth rate in the projective period. Decrease sensitivity of 15%.

Bovespa Holding

The goodwill generated on the acquisition of Bovespa Holding in 2008, grounded on expected future profitability and an economic and financial appraisal report on the investment, was R$ 16,064,309. At December 31, 2015, the test based on an appraisal report, then prepared by independent experts, identified the need to reduce the recoverable amount of Bovespa Holding by R$ 1,662,681 and, consequently, the goodwill book value corresponded to R$ 14,401,628.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Management understands that a projection period of ten years (rather than five) is based on the perception that the Brazilian capital markets in the variable income segment should experience prolonged growth, reflecting the time required for indicators such as participation of shares in the investor portfolios, and Brazil's Market Cap/GDP ratio, among others, may reach levels observed in other countries, indicating that long-term maturity has been reached.

The assumptions of the cash flow projective period also consider the expectation of growth and development of the capital markets in Brazil.

The sensitivity scenarios disclosed values in use of the CGU above the book value.

CETIP

The goodwill generated on the acquisition of CETIP in March 2017, amounting to R$ 7,937,171, is based on the expectation of future profitability and the Purchase Price Allocation (PPA) report, with R$ 5,041,133 allocated for CETIP UTVM and R$ 2,896,038 for CETIP UFIN.

The assumptions of the cash flow projective period also consider the expectation of growth of the fixed income, automotive and real estate market in Brazil.

The sensitivity scenarios disclosed values in use of CGUs above the book value.

Subsidiaries

Portal de Documentos and BLK

The goodwill generated on the acquisition of Portal de Documentos (R$68,100 in June 2019) and BLK (R$9,251 in March 2019) is based on expected future profitability and the Purchase Price Allocation (PPA) report.

At December 31, 2019, the main variables of the future cash flow projections of companies Portal de Documentos and BLK were reviewed and compared to the investment book values of R$96,326 and R$14,535, respectively.

The assumptions of the cash flow projective period also consider the expectation of growth of the real estate and collection industries (Portal de Documentos) and sophistication of the trading environment and algorithms (BLK) in Brazil.

The sensitivity analysis of the discount rate and perpetuity disclosed values in use of companies above book values, except for revenue growth scenarios, which were R$23,069 and R$5,527 below for Portal de Documentos and BLK, respectively.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

9. Loans and financing

B3 Loans Foreign involving Bank Other debt Debentures subsidiaries loans loans Total Balance at December 31, 2017 2,071,862 3,010,601 1,559,766 34,527 18,503 6,695,259 Additions/Appropriation of interest 146,014 190,598 85,249 10 1,518 423,389 Amortization of borrowing costs 1,529 2,818 - - 101 4,448 Amortization of interest (140,612) (199,251) (72,143) (79) (1,417) (413,502) Amortization of principal - (1,500,000) - (34,059) (3,131) (1,537,190) FX differences - - 261,527 - - 261,527 FX differences - Comprehensive income - - - (399) - (399) FX differences - Fair value hedge 346,882 - - - - 346,882 FX differences - Cash flow hedge 4,721 - - - - 4,721 Present value adjustment - Fair value hedge (27,867) - - - - (27,867) Balance at December 31, 2018 2,402,529 1,504,766 1,834,399 - 15,574 5,757,268 Additions/Appropriation of interest 156,345 132,154 78,996 - 2,502 369,997 Leases - - - - 19,330 19,330 Debentures’ issue - 1,200,000 - - - 1,200,000 Additions of borrowing costs - (1,059) - - - (1,059) Amortization of borrowing costs 2,464 2,785 - - 110 5,359 Amortization of interest (125,524) (130,601) (82,812) - (1,194) (340,131) Amortization of principal (22,884) (1,500,000) - - (8,703) (1,531,587) FX differences - - 71,934 - - 71,934 FX differences - Fair value hedge 95,411 - - - - 95,411 FX differences - Cash flow hedge (6,013) - - - - (6,013) Present value adjustment - Fair value hedge 17,088 - - - - 17,088 Balance at December 31, 2019 2,519,416 1,208,045 1,902,517 - 27,619 5,657,597

At December 31, 2019 Current 2,519,416 8,537 270,890 - 7,502 2,806,345 Noncurrent - 1,199,508 1,631,627 - 20,117 2,851,252 Book Balance 2,519,416 1,208,045 1,902,517 - 27,619 5,657,597

At December 31, 2018 Current 70,257 1,504,766 1,593,420 - 3,380 3,171,823 Noncurrent 2,332,272 - 240,979 - 12,194 2,585,445 Book Balance 2,402,529 1,504,766 1,834,399 - 15,574 5,757,268

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Consolidated Foreign debt Debentures Bank loans Other loans Total

Balance at December 31, 2017 2,071,862 3,010,601 533,727 18,503 5,634,693 Additions/Appropriation of interest 146,014 190,598 24,603 1,518 362,733 Amortization of borrowing costs 1,529 2,818 - 101 4,448 Amortization of interest (140,612) (199,251) (22,603) (1,417) (363,883) Amortization of principal - (1,500,000) (34,059) (3,131) (1,537,190) FX differences - - 85,020 - 85,020 FX differences - Comprehensive income - - (398) - (398) FX differences - Fair value hedge 346,882 - - - 346,882 FX differences - Cash flow hedge 4,721 - - - 4,721 Present value adjustment - Fair value hedge (27,867) - - - (27,867) Balance at December 31, 2018 2,402,529 1,504,766 586,290 15,574 4,509,159 Additions/Appropriation of interest 156,345 132,154 25,044 2,656 316,199 Leases - - - 22,546 22,546 Issue/contracting - 1,200,000 204,990 - 1,404,990 Additions of borrowing costs - (1,059) - - (1,059) Amortization of borrowing costs 2,464 2,785 - 110 5,359 Amortization of interest (125,524) (130,601) (28,130) (1,230) (285,485) Amortization of principal (22,884) (1,500,000) (204,990) (9,582) (1,737,456) FX differences - - 23,385 - 23,385 FX differences - Fair value hedge 95,411 - - - 95,411 FX differences - Cash flow hedge (6,013) - - - (6,013) Present value adjustment - Fair value hedge 17,088 - - - 17,088 Acquisition of subsidiary - - - 423 423 Balance at December 31, 2019 2,519,416 1,208,045 606,589 30,497 4,364,547

At December 31, 2019 Current 2,519,416 8,537 1,984 8,056 2,537,993 Noncurrent - 1,199,508 604,605 22,441 1,826,554 Book Balance 2,519,416 1,208,045 606,589 30,497 4,364,547

At December 31, 2018 Current 70,257 1,504,766 198,810 3,380 1,777,213 Noncurrent 2,332,272 - 387,480 12,194 2,731,946 Book Balance 2,402,529 1,504,766 586,290 15,574 4,509,159

Debt issued abroad

With the adoption of the fair value hedge accounting in March 2016 (Note 4 (c)), the principal amount of debt securities issued abroad in 2010 are now measured at fair value. The restated loan included the amounts to R$72,887 (R$70,257 at December 31, 2018), referring to half-yearly interest incurred until the reporting date. This transaction will mature on July 16, 2020.

The market value of securities, obtained from Bloomberg, considers principal and interest, and amounts to R$2,516,198 at December 31, 2019 (R$2,417,382 at December 31, 2018).

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Debentures

Contract rate Number Unit par value in R$ Total issuance Second issuance (single series) 102.80% DI 120,000 10,000.00 1,200,000

The first issue was fully settled on December 2, 2019. The second issue contains a renegotiation clause scheduled in March 2022 and payment of half-yearly interest in May and November.

At December 31, 2019, the principal amount plus interest less the cost incurred on the second issue of debentures is R$1,208,045 (R$1,504,766 at December 31, 2018 for the first issue).

Loans involving subsidiary - CETIP Lux

The loan agreements have been executed for a weighted average term of three years, with amortization of principal in September 2019 and December 2020, for US$404,800 and US$56,610 respectively. The weighted interest rate of the loan is some 4.50% p.a., with payment of interest on a half-yearly basis, annually or upon maturity of the principal, depending on the agreement.

In September 2019, the loan with the subsidiary amounting to US$ 404,800 was renegotiated to approximately 4 years and interest rate of 3.5% p.a.

Bank loans

During the exercises of 2014 and 2016, CETIP Lux raised bank loans amounting to US$100,000 and US$50,000 respectively referred to as CETIP Lux I and CETIP Lux II backed by a B3 fiduciary guarantee.

The loan referred to as CETIP Lux I has term of four years, with amortization of US$50,000 of the principal amount in August 2017 and amortization of the remaining balance in August 2018. The interest rate of the loan was 2.57% per annum and quarterly payments of interest.

In August 2017, the loan maturity was renegotiated and extended to August 2020, with the quarterly payments of interest at a rate of 3.6% per annum.

The loan referred to as CETIP Lux II has term of three years, with amortization of principal in September 2019. The interest rate of the loan is approximately 5.5% per annum and half-yearly payments of interest.

In September 2019, B3 took out a new bank loan amounting to US$50,000, for a period of 4 years, subject to interest rate of 3.47% p.a. to be paid on a quarterly basis. This amount was fully used for paying the maturing loan.

The loan agreements set out that CETIP Lux shall maintain a minimum equity amount over the agreement period. In case of noncompliance, the loan may mature in advance. In the year, this section was complied with.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

10. Other obligations B3 Consolidated 2019 2018 2019 2018 Current Repurchase agreements (1) - - 373,073 333,554 Demand deposits (2) - - 180,819 329,955 Synergy transfer 23,964 23,296 23,964 23,296 Amounts to be transferred - Direct Treasury 40,524 19,828 40,524 19,828 Amounts to be transferred - Incentives 41,880 - 41,880 - Payables – CME/ICE 40,920 4,142 40,920 4,142 Future installments (Note 2(d)(ii)) 23,717 - 23,717 - Other 28,175 27,987 79,650 33,058 Total 199,180 75,253 804,547 743,833

Noncurrent Future installments (Note 2(d)(ii)) 18,996 - 18,996 - Payables – CME/ICE 8,105 27,225 8,105 27,225 Other - - 900 - Total 27,101 27,225 28,001 27,225

(1) These refer to open market funding made by Banco B3, comprising repurchase agreements maturing on January 2, 2020 (2018 - January 2, 2019) and backed by Financial Treasury Bills (LFT), National Treasury Bills (LTN), and National Treasury Notes - serie B.

(2) These refer to demand deposits held by legal entities at Banco B3 with the sole purpose of settlement of clearing operations held within B3 and the Special System for Settlement and Custody (SELIC), pursuant to BACEN Circular Letter No. 3196 of July 21, 2005.

11. Provisions for tax, civil and labor contingencies, contingent assets and liabilities, judicial deposits and other provisions

a) Contingent assets

B3 has no contingent assets recognized in its balance sheet and, at present, no lawsuits which are expected to give rise to significant future gains. b) Provisions for tax, civil, and labor contingencies

B3 and its subsidiaries are defendants in a number of legal and administrative proceedings involving labor, tax and civil matters arising in the ordinary course of business.

Legal and administrative proceedings are classified, according to their likelihood of loss, as probable, possible and remote, based on an assessment made in accordance with the Company's contingency assessment guidelines and submitted to the Audit Committee.

The proceedings assessed as probable loss are mostly comprised as follows:

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

(i) Labor claims mostly relate to claims filed by former employees of B3 and employees of outsourced service providers, because of alleged noncompliance with labor legislation;

(ii) Civil proceedings mainly relate to aspects of civil liability of B3 and its subsidiaries, as well as to the cancellation of (i) units of interest of former members of the then CETIP Associação; and (ii) securities of former member of the then Associação BM&F; and

(iii) Tax proceedings for which provisions were set up mostly relate to PIS and COFINS levied on (i) B3 revenues and (ii) receipt of interest on equity. c) Legal obligations

These are represented by three groups of lawsuits in which B3 and its subsidiaries claim (i) non-levy of additional social security contribution on payroll and payments to self-employed professionals; (ii) the unconstitutionality of the broadened COFINS tax base by reference to Law No. 9718; and (iii) non-levy of ISS on the activity of permanence, registration of securities and other services. d) Other provisions

B3 has contracts that provide for the payment of attorneys’ success fees arising from tax and civil proceedings, in which B3 figures as defendant. Within its best estimates, B3 determined and provisioned the amounts for which it understands that there is likelihood of future disbursement, related to attorneys’ success fees from proceedings whose likelihood of loss is assessed as possible and remote.

e) Changes in balances

Changes in provisions for contingencies and legal obligations are broken down as follows:

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

B3 Legal Other Civil Labor obligations Tax provisions Total Balances at December 31, 2017 373,161 32,768 152,040 23,600 52,689 634,258 Provisions 80 3,300 7,874 - 5,349 16,603 Provision expenditure - (4,722) (159) - (2,522) (7,403) Reversal of provisions - (1,681) (4,521) - - (6,202) Reassessment of risks 21,829 187 - - (410) 21,606 Restatement 32,910 2,956 9,218 718 9,481 55,283 Balances at December 31, 2018 427,980 32,808 164,452 24,318 64,587 714,145

Provisions 378 4,425 9,818 4,076 13,800 32,497 Provision expenditure (3) (4,626) - (4,088) (3,877) (12,594) Reversal of provisions - (3,442) - - (416) (3,858) Reassessment of risks - (600) - 12 - (588) Restatement 120,323 3,069 10,070 678 2,557 136,697 Balances at December 31, 2019 548,678 31,634 184,340 24,996 76,651 866,299

Consolidated Legal Other Civil Labor obligations Tax provisions Total Balances at December 31, 2017 380,748 32,769 152,060 23,837 58,951 648,365 Provisions 80 3,310 7,912 2 5,354 16,658 Provision expenditure - (4,722) (159) - (2,522) (7,403) Reversal of provisions (7,922) (1,681) (4,521) - - (14,124) Reassessment of risks 21,829 187 - - (410) 21,606 Restatement 33,245 2,957 9,222 727 9,790 55,941 Balances at December 31, 2018 427,980 32,820 164,514 24,566 71,163 721,043

Provisions 378 4,425 9,880 4,081 13,923 32,687 Provision expenditure (3) (4,640) - (4,345) (7,239) (16,227) Reversal of provisions (30) (3,451) - - (453) (3,934) Reassessment of risks 32 (600) - 12 - (556) Restatement 120,325 3,071 10,078 682 2,868 137,024 Merger of subsidiary 122 15 36 - - 173 Balances at December 31, 2019 548,804 31,640 184,508 24,996 80,262 870,210

Considering the characteristics of the provisions, the timing of the cash disbursements, if any, cannot be predicted. f) Possible losses

The proceedings assessed as possible loss are so classified as a result of uncertainties surrounding their outcome. They are legal or administrative proceedings for which case law has not yet been established or which still depend on check and analysis of the facts, or even involve specific aspects that reduce the likelihood of loss.

B3 and its subsidiaries are parties to tax, civil and labor lawsuits involving risks of loss classified as possible, based on the assessment of B3’s legal department and external legal advisors, for which no provision has been recorded. These proceedings comprise mainly the following:

(i) Labor claims mostly relate to claims filed by former employees of B3 and of outsourced service providers, on account of alleged noncompliance with labor legislation. At December 31, 2019, lawsuits classified as possible loss amount to R$13,356 in B3 and R$13,708 in consolidated (R$33,892 in B3 and consolidated at December 31, 2018).

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

(ii) Civil proceedings mainly relate to aspects of civil liability of B3, as well as cancellation of units of interest of former members of the then CETIP Associação. The amount involved in civil proceedings classified as possible losses at December 31, 2019 totals R$81,697 in B3 and R$81,726 in the Consolidated (R$104,017 at December 31, 2018 in B3 and in the Consolidated).

(iii) The total amount involved in the tax proceedings assessed as possible loss amounts to R$473,236 in B3 (R$485,135 at December 31, 2018) and R$473,841 in the Consolidated (R$485,480 at December 31, 2018). The main tax proceedings of B3 and its subsidiaries refer to the following matters:

• classification of former Bovespa, in the period prior to its IPO operations, as payer of Social Contribution Tax for Social Security Financing (“COFINS”), which is subject to a declaratory judgment action referring to inexistence of a legal tax relationship with the Brazilian federal government, in which former Bovespa requests non-levy of referred to social contribution on revenues from the activities for which such company was organized, since these revenues do not fall into the concept of billing. As at December 31, 2019, the amount involved in referred to action is R$55,363 (R$68,706 at December 31, 2018). The former BM&F had a declaratory action with identical questioning, which became favorable, resulting in a rediction of R$14,994 in the amount involved in the discussion.

• collection of Withholding Income Tax (“IRRF”), referring to calendar year 2008, arising from the Brazilian IRS´s understanding that B3 is responsible for withholding and payment of IRRF on alleged capital gain by non-resident investors of Bovespa Holding S.A., resulting from merger of shares of said company by B3. On November 26, 2018, the B3 appealed to the Judiciary Branch against the decision of the Higher Chamber of CARF that maintained referred to tax assessment notice, and obtained a preliminary injunction suspending the enforceability of the tax credit. The amount involved in the related administrative proceeding at December 31, 2019 totals R$231,199 (R$222,396 at December 31, 2018).

• alleged levy of social security contributions on options granted based on the BM&F S.A. Stock Option Plans assumed by B3 and of B3 itself exercised by the Plans’ beneficiaries in 2011 and 2012. The Brazilian IRS inquiries are based on the understanding that stock options granted to employees represent salary in nature, since they correspond to a consideration for services rendered. On February 18, 2020, B3 obteined unappealable decision at Administrative Board of CARF, that is why from this date, the risk of loss came remote. At December 31, 2019, the amount involved in this administrative proceeding is R$102,087 (R$98,375 at December 31, 2018), related to social security contributions allegedly due.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

• on January 7, 2020, B3 was summoned in relation to the notices served by the municipality of São Paulo regarding Service Tax (ISS) on activities conducted by the OTC segment (former UTVM) developed by the former CETIP in 2016. The proceeding, assessed as possible loss, will represent a contingent liability of R$32,056 in January 2020, referring to the months of May through December 2016. In relation to the months of January through April 2016, judicial deposits have already been made regarding the proceedings that discuss (i) the jurisdiction of the municipalities of São Paulo and Rio de Janeiro to levy ISS; and (ii) the non-levy of ISS on the activities involving holding, registration of securities, among other services (Note 11 (h)). g) Remote losses

Between 2010 and 2019, B3 received three tax assessment notices from the Brazilian Internal Revenue Service (RFB), challenging the amortization, for tax purposes, of goodwill arising from the merger of Bovespa Holding S.A. shares into B3 in May 2008. B3 considers that the risk of loss associated with these tax proceedings is remote. The amounts involved in each tax proceeding are broken down as follows:

Amounts referring to administrative proceedings Period of tax amortization challenged 2019 2018 2008 and 2009 (1) 1,342,008 1,300,287 2010 and 2011 (2) 2,716,406 2,618,775 2012 and 2013 (3) 3,375,948 3,228,190 2014, 2015 e 2016 (4) 4,254,172 - Total 11,688,534 7,147,252

(1) B3 filed an appeal with the Judiciary through an action for annulment on April 23, 2018, against an unfavorable decision to B3 in the Câmara Superior de Recursos Fiscais do (CARF) issued in the notice of infraction issued on November 29, 2010. On June 12, 2018, the preliminary injunction granted suspended the collectability of the tax credit.

(2) On June 22, 2017, CARF granted the Voluntary Appeal filed by B3 and, on August 11, 2019, the Higher Board of Tax Appeals (CSRF) dismissed B3’s appeal upon granting the appeal to the High Court of Justice lodged by the National Treasury General Attorney’s Office (PGFN). The motion for clarification filed by B3 is currently being awaited, during which period the debt remains under suspended enforceability.

(3) In October 2017, the Company filed a related administrative protest, for which an unfavorable to the B3 decision was handed down by the Brazilian IRS Judgment Office (“DRJ”), upholding the notice. On October 16, 2019, the lower panel of the Administrative Board of Tax Appeals (CARF) issued a decision granting the Voluntary Appeal filed by B3.

(4) On October 18, 2019, B3 was served a new notice, which was challenged within the regulatory deadline. Judgment of the challenge by the Brazilian IRS Judgment Office (DRJ) is currently being awaited.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

B3 is a defendant in 3 (three) class actions and 2 (two) public civil actions, filed against the then Bolsa de Mercadorias & Futuros - BM&F (“BM&F”), to determine alleged Treasury losses arising from transactions performed by the Central Bank of Brazil in January 1999 in the dollar futures market. Currently, only four (4) of these lawsuits against B3 are in progress. In March 2012, those claims had been accepted by the lower court for conviction of most of the defendants in these proceedings, including the entity then known as BM&F. The combined convictions amounted to R$7,005 million, from which, according to one of the rulings, the gains obtained by the Central Bank of Brazil due for not using international reserves, amounting to R$5,431 million, could be deducted. B3 had also been sentenced to pay a civil fine of R$1,418 million. In June 2017, the Federal Regional Court ruled in favor of the appeals filed by B3, reversing the sentences to exclude the liability for compensation for any damages suffered by the Brazilian Treasury Department. The Federal Prosecution Office (MPF) filed appeals to the High Court and one appeal to the Supreme Court against the decisions that reversed the negative judgments in all proceedings. One of the appeals to the High Court filed by MPF was analyzed and rejected, due to the unappealable decision already issued in favor of B3. The other appeals to the High Court and the appeal to the Supreme Court were accepted for judgment by the Brazilian High Court of Justice (STJ) and Brazilian Supreme Court (STF), respectively. All amounts reported in this item are historical amounts referring to January 1999 and would be monetarily restated, including default interest and loss of suit expenses. h) Judicial deposits B3 Consolidated Description 2019 2018 2019 2018 Legal obligations (1) 160,927 252,487 160,927 252,487 Tax (2) 93,728 91,122 93,926 91,523 Labor 13,048 13,131 13,200 13,284 Civil 6,930 6,639 6,937 6,639 Total 274,633 363,379 274,990 363,933

(1) Of the total deposits related to legal obligations, R$130,956 (R$123,354 at December 31, 2018) refers to the proceeding that challenges non-levy of ISS on the activities involving holding, registration of securities, among others. In addition, the amount of R$6,705 (R$80,245 at December 31, 2018) refers to proceedings in which B3 seeks non-levy of additional social security contribution tax on payroll and payments made to self-employed, as well as challenge regarding the legality of the requirement to pay the Accident Prevention Factor.

(2) Of the total judicial deposits of B3, the following are highlighted: (i) R$55,363 (R$65,579 at December 31, 2018) referring to proceedings challenging the classification of former Bovespa as subject to the payment of COFINS, which are assessed as possible loss by B3 (Note 11); and (ii) R$15,892 (R$15,458 at December 31, 2018) referring to proceedings challenging PIS and COFINS on interest on equity received.

We stress that the tax-related judicial deposits comprise, in addition to the proceedings classified as probable loss and legal obligations, the proceedings whose likelihood of loss is rated as possible.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

12. Equity a) Capital

B3’s fully subscribed and paid-up capital totals R$3,548,655, comprising 2,059,138,490 registered common shares with voting rights and no-par value, of which 2,046,098,617 common shares are outstanding at December 31, 2019 (2,044,215,807 at December 31, 2018).

B3 is authorized to increase its capital up to the limit of 2,500,000,000 common shares, through a resolution of the Board of Directors, without any amendment to its Articles of Incorporation. b) Treasury shares

Share buyback program

At a meeting held on June 27, 2019, the Board of Directors approved B3's Share Buyback Program, beginning on June 28, 2019 and ending on February 29, 2020. The limit in the number of shares that may be acquired by B3 is 38,500,000 common shares, representing 1.87% of total outstanding shares Until December 31, 2019, B3 had purchased 1,962,800 shares, which represents 5.1% of the total provided for in the buyback program.

The shares purchased in connection with the Share Buyback Program may be cancelled or used for transferring shares to the Stock Option Plan beneficiaries.

Changes in treasury shares for the period are as follows:

Quantity Amount

Balances at December 31, 2017 19,979,060 221,759 Shares sold – Stock option and stock grant plans (5,056,377) (56,124) Balances at December 31, 2018 14,922,683 165,635

Shares acquisition – buyback program 1,962,800 75,531 Shares sold – Stock option and stock grant plans (3,845,610) (44,547) Balances at December 31, 2019 13,039,873 196,619 Average cost of treasury shares (R$ per share) 15.08 Market value of treasury shares 560,323 c) Revaluation reserves

Revaluation reserves were established because of the revaluation of works of art in B3 and of the properties of subsidiary BVRJ in 2007, based on independent experts’ appraisal reports.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated) d) Capital reserve

This refers substantially to amounts originated in the merger of Bovespa Holding and CETIP shares in 2008 and 2017, respectively, and other corporate events allowed by the Brazilian Corporation Law, such as (i) capital increase through merger, (ii) redemption, repayment or purchase of shares, and (iii) events associated with the stock option and stock grant plans. e) Income reserves

(i) Legal reserve

Legal reserve is annually set up with allocation of 5% of net income for the year, capped at 20% of capital. The legal reserve aims at ensuring integrity of capital and may only be used to absorb losses and increase capital. The legal reserve is not required to be set up considering that its amount plus the capital reserves exceeds 30% of the Company capital.

(ii) Statutory reserves

Represent funds and safeguard mechanisms required for the activities of B3, in order to ensure the proper settlement and reimbursement of losses arising from the intermediation of transactions carried out in its trading sessions and/or registered in any of its trading, registration, clearing and settlement systems, and from custody services.

Pursuant to the Articles of Incorporation, the Board of Directors may, when the amount of the statutory reserve is sufficient to meet the purposes for which it was originally established, propose that part of the reserve be distributed to the shareholders of the B3. f) Dividends and interest on equity

As provided for in the Articles of Incorporation, shareholders are entitled to mandatory minimum dividends of 25% of net income for the year, adjusted under Brazilian Corporation Law.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

The interests on equity and dividends approved in relation to P&L for the period are as follows:

Date of Date of Gross per Total gross IR/CS Total net Earning approval payment share (R$) amount Effect amount

Interest on equity 03/21/2019 04/05/2019 0.192951 395,000 (134,300) 260,700

Interest on equity 06/19/2019 07/17/2019 0.190469 389,999 (132,600) 257,399

Dividends 06/27/2019 07/17/2019 0.103203 211,150 - 211,150 Interest on equity 09/19/2019 10/07/2019 0.188189 385,000 (130,900) 254,100 Dividends 09/19/2019 10/07/2019 0.129420 264,770 - 264,770 Interest on equity 12/12/2019 01/13/2020 0.190118 389,000 (132,260) 256,740 Dividends 12/12/2019 01/13/2020 0.163726 335,000 - 335,000 Total for the year 2019 2,369,919 (530,060) 1,839,859

Interest on equity 04/13/2018 05/08/2018 0.097931 200,000 (68,000) 132,000

Interest on equity 06/22/2018 07/10/2018 0.221147 452,000 (153,680) 298,320

Interest on equity 09/14/2018 10/05/2018 0.176132 360,000 (122,400) 237,600 Interest on equity 12/14/2018 01/08/2019 0.206925 423,000 (143,820) 279,180 Total for the year 2018 1,435,000 (487,900) 947,100

On March 05, 2020, the Board of Directors approved the proposal for payment of additional dividends amounting to R$994,247 (Note 22). g) Earnings per share

Basic Consolidated 2019 2018 Numerator Net income available to shareholders of B3 2,714,166 2,087,444 Denominator Weighted average number of outstanding shares 2,046,501,966 2,043,143,460

Basic earnings per share (in R$) 1.326246 1.021683

Diluted Consolidated 2019 2018 Numerator Net income available to shareholders of B3 2,714,166 2,087,444 Denominator Weighted average number of outstanding shares adjusted by effects of stock options and stock grant plans 2,053,623,408 2,053,949,383

Diluted earnings per share (in R$) 1.321647 1.016307

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

13. Transactions with related parties a) Transactions and balances with related parties

Assets / (liabilities) Revenue / (expenses) Description 2019 2018 2019 2018

Banco B3 S.A (1) Accounts receivable 1,143 1,316 - - Interest on equity receivable 4,675 5,015 - - Accounts payable (199) (177) - - Recovery of expenses - - 14,265 13,492 Income from fees - - 203 101 Expenses from fees - - (2,327) (2,132) Interest on equity - - 10,646 5,900

CETIP Lux Accounts payable (1,902,517) (1,834,399) - - Interest on loans - - (78,996) (85,249) Exchange rate variation - loans - - (71,934) (261,527)

BM&FBOVESPA Supervisão de Mercados Accounts receivable 195 187 - - Accounts payable (430) (344) - - Donation and contribution - - (8,625) (20,426) Recovery of expenses - - 2,718 2,800

Other related parties Accounts receivable 109 95 - - Accounts payable (49) - - - Interest on equity - - 34,475 31,299 Recovery of expenses - - 4,911 1,830 Sundry revenues - - 609 - Expenses with courses - - (94) (142) Donation - - - (2,337) Telecomunication services - - (73) (720) Sundry expenses - - (4,230) (3,708)

B3 follows a policy on transactions with related parties, approved by the Board of Directors, which aims to establish rules to ensure that all decisions involving related-party transactions and other situations of potential conflict of interest are taken to the interests of B3 and its shareholders.

The main recurring transactions with related parties are described below and were carried out under the following conditions:

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

The BM&FBOVESPA Supervisão de Mercados - BSM (“BSM”) is a not-for-profit civil association engaged in the analysis, supervision and inspection of transactions and activities of the companies of Trading Members and Regulators that perform clearing and settlement activities and/or custody services that operate in the stock exchange market and in the organized over-the-counter market managed by B3.In addition to these attributions, BSM incorporated the self-regulatory activities of the marketable securities organized markets.

B3 has entered into an agreement with BSM for the transfer and recovery of costs, which establishes the reimbursement to B3 of expenses incurred for resources and infrastructure made available to BSM to assist in the performance of its supervision activities. Such costs are determined on a monthly basis using the methodology specified in the agreement entered into by and between the parties and also include the activities related to the Mecanismo de Ressarcimento de Prejuízos (“MRP”), as this mechanism is administered by BSM.

B3 makes transfers to supplement financing for the activities of BSM and regular transfers of fines for failure to settle debts and deliver assets, as set out in Circular Letter No. 044/2013 of B3.

Sundry expenses with other related parties consist mainly of general expenses of UK Ltd. Office and relating to services provided for member companies member of B3's Board of Directors, whose terms ended by April 29, 2019. Their engagement was conducted using the criteria established by the related parties’ policy and for other situations involving conflicts of interest.

Sundry revenues from other related parties refer mainly to services provided by B3 to BLK referring to Market data, data signal sales, and co-location hosting services.

B3 is an honorary associate of Associação BM&F and in December 2019, B3 assigned the usufruct of the government securities owned by B3 to the Association. This usufruct is aimed at ensuring the transfer of yield to fund the activities developed by Associação BM&F for a maximum period of three years as from signature date. b) Key management personnel compensation

Key management personnel include directors and statutory officers. Consolidated Benefits to managing officers 2019 2018

Managing officers Short-term benefits (salaries, profit sharing etc.) 36,743 33,792 Share-based compensation (1) 83,532 61,887 Board of Directors Short-term benefits (salaries, profit sharing etc.) 12,272 12,161 Share-based compensation (1) 7,319 5,189

(1) This refers to expenses computed in the quarter relating to share-based compensation, increased by labor and social security charges of key management personnel. These expenses were recognized according to the criteria described in Note 15.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

14. Collateral for transactions

Acting as central guarantor of the derivatives, exchange and floating income markets, B3 manages two clearinghouses considered systemically important by the Central Bank of Brazil: BM&FBOVESPA and Foreign Exchange.

The activities carried out by the clearinghouse are governed by Law No. 10214/01, which authorizes the multilateral clearing of obligations, establishes the central counterparty role of the systemically important clearinghouse and permits the utilization of the collateral obtained from defaulting participants to settle their obligations in the clearinghouse environment, including in cases of civil insolvency, agreements with creditors, intervention, bankruptcy and out-of-court liquidation.

Through its foreign exchanges, B3 acts as a central counterparty in the derivatives market (futures, forward, options and swaps), spot foreign exchange market and variable income (spot, forward, option, futures and lending of securities). In other words, by assuming the role of a central counterparty, B3 becomes responsible for the settlement of trades carried out and/or registered in its systems, as established in the applicable regulations.

The performance of B3 as a central counterparty exposes it to the credit risk of the participants that utilize its settlement systems. If a participant fails to make the payments due, or to deliver the assets or commodities due, it will be incumbent upon B3 to resort to its safeguard mechanisms, in order to ensure the proper settlement of the transactions in the established time frame and manner. In the event of a failure or insufficiency of the safeguard mechanisms of its foreign exchanges, B3 might have to use its own equity, as a last resort, to ensure the proper settlement of trades.

The clearinghouse is not directly exposed to market risk, as they do not hold net long or net short positions in the various contracts and assets traded. However, an increase in price volatility can affect the magnitude of amounts to be settled by the various market participants and can also heighten the probability of default by these participants. Furthermore, as already emphasized, the clearinghouse is responsible for the settlement of the trades of a defaulting participant, which could result in losses for B3 if the amounts due surpass the amount of collateral available. Accordingly, despite the fact that there is no direct exposure to market risk, this risk can impact and increase the credit risks assumed.

Each clearinghouse has its own risk management system and safeguard structure. The safeguard structure of a clearinghouse represents the set of resources and mechanisms that it can utilize to cover losses relating to the settlement failure of one or more participants. These systems and structures are described in detail in the regulations and manuals of each clearinghouse and have been tested and ratified by the Central Bank of Brazil (BACEN), in accordance with National Monetary Council (CMN) Resolution No. 2882/01 and BACEN Circular No. 3057/01.

The safeguard structures of the clearinghouses are based largely on a loss-sharing model called defaulter pays, in which the amount of collateral deposited by each participant should be able to absorb, with a high degree of confidence, the potential losses associated with its default. Consequently, the amount required as collateral for participants is the most important element in our management structure of the potential market risks arising from our role as a central counterparty.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

For most contracts and operations involving assets, the required value as collateral is sized to cover the market risk of the business, i.e. its price volatility during the expected time frame for settlement of the positions of a defaulting participant. This timeframe can vary depending on the nature of contracts and assets traded.

The models used for calculating the margin requirements are based, in general, on the concept of stress testing, in other words, a methodology that attempts to measure market risk into account not only recent historical volatility of prices, but also the possibility of the occurrence of unexpected events that modify the historical patterns of behavior of prices and the market in general.

In BM&FBOVESPA, the guarantee margin is defined by the risk faced by the clearinghouse of closing a portfolio. To calculate the risk of closing a portfolio containing positions and guarantees from multiple markets and asset classes, B3 developed an innovative risk measure: Close-Out Risk Evaluation (CORE).

The operations in the B3 markets are secured by margin deposits in cash, government and corporate securities, letters of guarantee and shares among others. The guarantees received in cash, in the amount of R$3,013,447 (R$2,110,933 at December 31, 2018), are recorded as a liability under “Collateral for transactions” and collaterals, in the amount of R$357,884,530 (R$317,273,984 at December 31, 2018), are recorded in memorandum accounts. At December 31, 2019, total collaterals deposited by members amounts to R$360,897,977 (R$319,384,917 at December 31, 2018), as follows: a) Collaterals deposited by members

2019 2018 BM&FBOVESPA Foreign Exchange BM&FBOVESPA Foreign Exchange Clearinghouse Clearinghouse Clearinghouse Clearinghouse Federal government securities 264,835,056 7,867,152 255,845,092 7,786,067 Shares 75,698,410 - 46,197,602 - International securities (1) 4,894,286 - 3,443,152 - Letters of guarantee 3,200,560 - 2,463,387 - Cash amounts deposited 2,972,940 40,307 2,110,733 - Bank Deposit Certificates (CDBs) 1,309,616 - 1,467,790 - Gold 17,373 - 16,018 - Other 62,277 - 55,076 - Total 352,990,518 7,907,459 311,598,850 7,786,067

(1) American and German government securities as well as ADRs (American Depositary Receipts). b) Other safeguard mechanisms

(i) Minimum non-operating guarantee (“GMNO”): The GMNO deposit is an access requirement for full negotiation participants (“PNP”) and Settlement participants (“PL”) to the clearinghouse of BM&FBOVESPA and the required values are defined in the BM&FBOVESPA access manual. The GMNO is broken down as follows:

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Breakdown 2019 2018 Share Investment Fund (FILCB) 923,737 858,460 Amounts deposited 923,737 858,460 Amounts required of members 833,185 774,000 Amount in excess of the minimum required 90,552 84,460

(ii) Fundo de Liquidação (“Settlement Fund”): funds in the FLI are used by the clearinghouse of BM&FBOVESPA to cover any losses arising from default by one or more clearing members (“MC”), after there are no more guarantees deposited by members under the responsibility of the MCs in default. In addition to the contribution of the MCs to the FLI, there is also the contribution of B3, which is a portion of its equity, allocated to the fund. These contributions are allocated to the Investment Fund BM&FBOVESPA Clearinghouse Liquidity (“FILCB”), which is formally constituted as an investment fund, under the provisions of the applicable legislation, administered, managed and guarded by Banco B3.

(iii) Fundo de Liquidação de Operações de Câmbio (“FLOC”), composed of collaterals transferred by foreign exchange clearinghouse participants and B3 funds, intended to guarantee the proper settlement of transactions.

FLI and FLOC are broken down as follows:

2019

Special Equity - Clearing Foreign exchange Clearinghouse and BM&FBOVESPA clearing custody

Federal government securities - 277,022 - Federal government securities of B3 - 132,745 - Share investment fund (FILCB) of B3 671,456 - - Share investment fund (FILCB) 799,486 - - Cash amounts deposited - 200 - Amounts deposited 1,470,942 409,967 - Amounts required from participants 720,925 117,350 - Amounts required from B3 636,111 117,350 - Value in excess of the minimum required 113,906 175,267 -

Special Equity (1) 168,920 81,779 83,727

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

2018 Special Equity - Clearing Foreign exchange Clearinghouse and BM&FBOVESPA clearing custody

Federal government securities - 233,435 - Federal government securities of B3 - 125,162 - Share investment fund (FILCB) of B3 639,141 - - Share investment fund (FILCB) 732,355 - - Cash amounts deposited - 200 - Amounts deposited 1,371,496 358,797 - Amounts required from participants 665,000 117,250 - Amounts required from B3 600,000 117,250 -

Value in excess of the minimum required 106,496 124,297 -

Special Equity (1) 159,272 77,110 78,952

(1) Patrimônio Especial (Special equity) Selic das câmaras BM&FBOVESPA, Câmbio e de compensação e custódia, in compliance with the provisions of article 5 of Law 10214 of March 27, 2001 and article 19 of Bacen circular No. 3057 of August 31, 2001, B3 maintain in federal government securities.

(iv) Cash of B3 dedicated to BM&FBOVESPA Clearinghouse: portion of B3 equity, formally and exclusively dedicated to the clearinghouse - used by BM&FBOVESPA Clearinghouse for the treatment of a failure in the settlement window, ensuring the necessary resources to fulfill its payment obligations to creditor clearing members.

Breakdown 2019 2018

Federal government securities 1,289,566 1,217,562 Amounts deposited 1,289,566 1,217,562 Amounts required of B3 1,200,000 1,200,000 Amount in excess of the minimum required 89,566 17,562

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

15. Employee benefits a) Stock Grant - long-term incentive

B3 recognized expenses related to Stock Grant Plan matched against capital reserves in equity, based on the fair value of the share at the grant date of the plans and charges in personnel expenses calculated based on the fair value of the share at December 31, 2019. As shown in the table below:

Consolidated 2019 2018 Expenses related to granting of Stock Options (83,850) (72,216) Tax expenses (102,552) (66,135) Hedge Instrument Effect 35,141 - Total (151,261) (138,351)

B3 will record the expenses relating to the Stock Grant Program which were granted for replacement of unvested options of the Stock Option Plan, for the same fair value of options previously granted, in accordance with CPC 10 (R1)/IFRS 2.

Effects arising from transfer of shares

At December 31, 2019, the cost of shares transferred related to the grants of the Stock Grant Plan amounted to R$44,125 (R$55,758 at December 31, 2018).

Pricing model

For options granted under the Stock Grant Plan, the fair value corresponds to the option closing price on the grant date.

For the case of cash-settled share-based compensation programs, the fair value payable to executive officers is recognized as an expense with the corresponding increase in liabilities for the period in which executive officers acquire the right to receive. The liability is measured again at each balance sheet date and on the settlement date. Any changes in the fair value of the liability are recognized as personnel expenses in the statement.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Stock Grant – Summary/changes

Fair value of Outstanding shares on the Number of Changes in the year share Conversion/ Vesting grant date (R$ shares at New contracts at Dilution Grant Date period up to per share) 12/31/2018 programs Performed Canceled 12/31/2019 percentage (1)

01/05/2015 01/07/2019 9.22 463,928 - (440,239) (23,689) - 0.00% 01/02/2015 01/02/2019 9.50 512,180 - (511,580) (600) - 0.00% 01/08/2016 01/14/2019 10.52 712,757 - (701,024) (11,733) - 0.00% 01/08/2016 01/13/2020 10.52 527,395 - (4,884) (2,467) 520,044 0.03% 01/08/2016 04/30/2019 10.52 172,697 - (148,026) (24,671) - 0.00% 01/06/2017 01/15/2019 17.05 589,015 - (569,560) (19,455) - 0.00% 01/06/2017 01/15/2020 17.05 570,095 - (5,884) (2,225) 561,986 0.03% 01/06/2017 01/15/2021 17.05 380,791 - (4,680) (3,427) 372,684 0.02% 01/06/2017 04/30/2019 17.05 172,696 - (151,109) (21,587) - 0.00% 03/29/2017 03/29/2019 19.35 201,550 - (201,550) - - 0.00% 03/29/2017 03/30/2020 19.35 302,325 - - - 302,325 0.01% 03/29/2017 03/29/2021 19.35 302,326 - - - 302,326 0.01% 03/29/2017 01/10/2020 19.35 718,475 - - - 718,475 0.04% 03/29/2017 01/10/2021 19.35 718,475 - - - 718,475 0.04% 11/13/2017 11/13/2019 22.70 129,521 - (115,200) (14,321) - 0.00% 11/13/2017 11/13/2020 22.70 129,498 - (3,486) (8,406) 117,606 0.01% 11/13/2017 11/15/2021 22.70 124,208 - (881) (5,725) 117,602 0.01% 01/08/2018 01/15/2019 23.90 692,700 - (692,700) - - 0.00% 01/08/2018 01/15/2020 23.90 700,426 - (7,858) (4,377) 688,191 0.03% 01/08/2018 01/15/2021 23.90 700,426 - (4,467) (7,768) 688,191 0.03% 01/08/2018 04/30/2021 23.90 172,690 - - - 172,690 0.01% 01/08/2018 01/14/2022 23.90 343,090 - (3,054) (7,925) 332,111 0.02% 01/08/2019 01/15/2020 27.88 - 659,019 (5,342) (387) 653,290 0.03% 01/08/2019 01/15/2021 27.88 - 659,017 (1,244) (4,483) 653,290 0.03% 01/08/2019 01/17/2022 27.88 - 659,016 (962) (4,764) 653,290 0.03% 01/08/2019 01/16/2023 27.88 - 659,018 (822) (4,906) 653,290 0.03% 01/08/2019 04/30/2021 27.88 - 159,408 - - 159,408 0.01%

9,337,264 2,795,478 (3,574,552) (172,916) 8,385,274 0.41%

(1) The number of outstanding shares at December 31, 2019 is 2,046,098,617.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated) b) Stock options - Long-term incentive

B3 entered into commitments with beneficiaries to hold them harmless from any potential liabilities related to the Option Plans. At December 31, 2019, the potential liabilities are recognized for R$36,038 (R$34,747 at December 31, 2018). c) Matching Program

The Board of Directors from CETIP approved on November 4, 2015, the Matching Program. The program provides for the possibility of the participant investing a certain percentage of its profit sharing in the B3 shares and in return receiving the equivalent amount in cash from the B3, provided that the grace conditions are met. If the conditions are not met (investment or expiry of the grace period), the right to receive the consideration (matching) will be canceled.

The current Matching Program was implemented by CETIP in April 2017 and granted participants the right to receive the equivalent of 1.38 common share issued by the B3 for each share acquired, totaling the amount equivalent to 554,068 shares issued by B3. In addition to the amount equivalent to matching shares, participants will also be entitled, at the end of each grace period, to receive the amount equivalent to dividends and proceeds resolved by the B3 over each grace period. The granting of the matching shares was divided into 4 equal lots, each one equivalent to 25% of the shares, with a grace period of 12, 24, 36 and 48 months, respectively, from the program implementation date.

The fair value payable is recognized as an expense with the corresponding increase in liabilities for the period in which participants acquire the right to payment. The liability is measured again at each balance sheet date and on the settlement date at the average amount of B3 share of the last 30 trading sessions. Any changes in the fair value of the liability are recognized as personnel expenses in the income statement.

B3 recognized expenses relating to the Matching Plan and related charges amounting to R$9,272 in the period (R$5,490 December 31, 2018). d) Supplementary pension plan

Due to merger of CETIP, B3 sponsors two private pension plans (Plano B3 (formerly named Plano BM&FBOVESPA) managed by Mercaprev and Plano CETIP managed by Itaú Fundo Multipatrocinado (IFM)) structured under the defined contribution type. After the merger date, new members are only allowed in Plano B3. On January 02, 2020, management of Plano B3 was transferred to IFM. After such transfer, the two plans maintained by B3 are managed by IFM.

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

16. Income tax and social contribution a) Deferred income tax and social contribution - Changes

The balances of and changes in deferred income and social contribution taxes recognized are as follows:

B3 (Debt) credit in the (Debt) credit in statement of the income comprehensive 2018 statement income 2019 Deferred assets Tax, civil and labor contingencies 229,436 70,242 - 299,678 Tax loss carryforwards 741,113 (63,362) - 677,751 Fair Value hedge – derivatives 117,940 32,440 - 150,380 Stock grant plan – Long-term incentive 61,291 28,074 - 89,365 Profit sharing 55,289 (2,234) - 53,055 Impairment 25,238 (22,273) - 2,965 Amortization/depreciation of surplus value 50,376 (3,561) - 46,815 Revenues to be allocated 29,577 6,170 - 35,747 Exchange Variation 88,373 25,018 - 113,391 Other temporary differences 76,527 21,222 (2,065) 95,684 Total deferred tax assets 1,475,160 91,736 (2,065) 1,564,831

Deferred tax liabilities Goodwill amortization (1) (4,625,854) (478,511) - (5,104,365) Market to market - Financial instruments (129,545) (28,678) 4,224 (153,999) Other temporary differences (64,220) (21,324) (2,312) (87,856) Total deferred tax liabilities (4,819,619) (528,513) 1,912 (5,346,220)

Deferred taxes, net (3,344,459) (436,777) (153) (3,781,389)

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Consolidated (Debt) credit (Debt) credit in in the the statement of income comprehensive Acquisition of 2018 statement income subsidiaries 2019 Deferred assets Tax, civil and labor contingencies 229,463 68,322 - 2,032 299,817 Tax loss carryforwards 741,113 (60,149) - - 680,964 Fair Value hedge - derivatives 117,940 32,440 - - 150,380 Stock grant plan – Long-term incentive 61,291 30,343 - - 91,634 Profit sharing 55,289 (1,514) - - 53,775 Impairment 25,238 (22,273) - - 2,965 Amortization/depreciation of surplus value 50,376 (3,561) - - 46,815 Revenues to be allocated 29,577 6,170 - - 35,747 Exchange Variation 88,373 25,024 - - 113,397 Other temporary differences 76,528 21,431 (2,065) - 95,894 Total deferred tax assets 1,475,188 96,233 (2,065) 2,032 1,571,388

Deferred tax liabilities Goodwill amortization (1) (4,625,854) (478,511) - - (5,104,365) Marketo To Market - Financial instruments (129,554) (28,678) 4,224 - (154,008) Other temporary differences (64,220) (21,343) (2,311) (13,529) (101,403) Total deferred tax liabilities (4,819,628) (528,532) 1,913 (13,529) (5,359,776)

Deferred taxes, net (3,344,440) (432,299) (152) (11,497) (3,788,388)

(1) Deferred income and social contribution tax liabilities arising from temporary difference between the goodwill tax base and its carrying amount in the statement of financial position, given that goodwill continues to be amortized for tax purposes, but is no longer amortized as of January 1, 2009 in accounting records, resulting in a tax base lower than the goodwill carrying amount. This temporary difference may result in amounts becoming taxable in future periods, when the carrying amount of the asset will be reduced or settled, thus requiring the recognition of a deferred tax liability.

b) Estimated realization period

Deferred tax assets arising from temporary differences are recorded in the books taking into consideration their probable realization, based on projections of future results prepared based on internal assumptions and future economic scenarios that may, accordingly, not materialize as expected.

The estimated realization of tax credits and provision for deferred taxes and contributions as at December 31, 2019 are as follows:

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

Income tax and Provision for social deferred taxes Total Temporary contribution and deferred, differences losses Total contributions net 2020 362,143 329 362,472 (1,638) 360,834 2021 52,839 168,523 221,362 (1,624) 219,738 2022 26,751 310,307 337,058 (1,606) 335,452 2023 111,005 201,807 312,812 (1,601) 311,211 2024 4,273 - 4,273 (801) 3,472 2025 560 - 560 - 560 2026 - - - - - From 2026 onwards 332,851 - 332,851 (1,834,042) (1,501,191) Goodwill (1) - - - (3,518,464) (3,518,464) Total 890,422 680,966 1,571,388 (5,359,776) (3,788,388)

(1) Deferred tax liabilities arising from goodwill will be realized when the difference between the tax base of goodwill and its carrying amount is reversed, in whole or in part, by the asset impairment, disposal, or as a result of provisions set up for tax proceedings. The proceedings currently assessed as remote risk of loss discuss amortization, for tax purposes, of the goodwill arising from merger of the shares of Bovespa Holding S.A. in May 2008 (Note 11 (g)).

Since the income tax and social contribution base arises not only from the profit that may be generated, but also from the existence of nontaxable income, nondeductible expenses, tax incentives and other variables, there is no immediate correlation between B3’s net income and the income (loss) subject to income tax and social contribution. As such, expected use of tax credits should not be regarded as the sole evidence of B3’s future P&L.

At December 31, 2019, the balance of goodwill that is deductible for income tax and social contribution purposes is R$3,518,464 (R$4,925,847 at December 31, 2018) . c) Conciliation of income tax and social contribution expense

Conciliation of the income tax and social contribution amounts recorded in P&L (B3 and consolidated) and their respective amounts at statutory rates is as under:

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

B3 Consolidated 2019 2018 2019 2018

Income before income tax and social contribution 3,315,729 2,311,914 3,339,046 2,338,409

Income tax and social contribution before additions and exclusions computed at the statutory rate of 34% (1,127,348) (786,051) (1,135,276) (795,059)

Adjustments: 525,785 561,581 509,434 545,001 Dividends received abriad 535,625 487,900 537,825 487,900 Exchange rate variation on foreign investment 17,840 62,910 17,840 62,910 Effect of taxes on income abroad 9,707 12,658 9,707 12,658 Equity 16,260 15,935 1,070 729 Other (53,647) (17,822) (57,008) (19,196)

Income tax and social contribution (601,563) (224,470) (625,842) (250,058)

Effective rate 18.14% 9.71% 18.74% 10.69%

d. Taxes to be offset and recoverable

Taxes to be offset and recoverable are as follows:

B3 Consolidated Description 2019 2018 2019 2018 IRPJ/CSLL anticipated – current year 196,418 19,494 198,944 19,494 IRPJ and CSLL tax losses 61,725 55,565 61,807 56,250 IRRF - financial investments - current year 87,389 72,052 88,253 73,017 Foreign taxes to be offset 55,054 38,106 65,010 38,106 PIS/Cofins to be offset 37,896 19,932 39,491 20,489 Sundry taxes 26,237 23,014 27,972 25,554 Total 464,719 228,163 481,477 232,910

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

17. Revenues

B3 Consolidated 2019 2018 (*) 2019 2018 (*)

Gross revenue 6,446,999 5,260,039 6,576,507 5,351,875

Listed 4,266,385 3,195,939 4,266,356 3,196,031 Cash equities and equities instruments 2,752,336 1,961,438 2,752,336 1,961,554 Trading and post-Trading 2,345,379 1,648,287 2,345,379 1,648,287 Depositary 141,731 122,221 141,731 122,221 Securities lending 151,946 116,400 151,946 116,400 Listing and services for issuers 113,280 74,530 113,280 74,646

Interest Rates BRL, FX and commodities 1,514,049 1,234,501 1,514,020 1,234,477 Trading and post-Trading 1,514,049 1,234,501 1,514,020 1,234,477

OTC 991,010 970,169 991,010 970,169 Fixed income 634,144 648,319 634,144 648,319 Derivatives 191,874 173,599 191,874 173,599 Others 164,992 148,251 164,992 148,251

Infrastructure for financing 503,084 465,092 566,378 501,726

Technology, data and service 686,520 628,839 752,763 683,949 Technology and access 439,742 412,281 448,384 412,281 Data and analytics 173,749 151,270 178,179 156,507 Bank B3 - - 45,926 36,203 Others 73,029 65,288 80,274 78,958

Revenue deductions (660,447) (514,664) (668,751) (519,960) PIS and Cofins (552,425) (428,236) (558,005) (431,908) Service tax (108,022) (86,428) (110,746) (88,052)

Net revenues 5,786,552 4,745,375 5,907,756 4,831,915

(*) Restatement according to Note 2 (e)(i).

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

18. Sundry expenses

B3 Consolidated Description 2019 2018 (*) 2019 2018 (*) Expenses with sundry provisions (1) (161,180) (102,260) (162,033) (105,123) Contributions and donations (19,198) (18,330) (19,417) (18,487) Electricity, water and sewage (17,627) (18,542) (17,890) (18,964) Travels (6,788) (7,009) (7,317) (7,434) Comunications (2,582) (3,309) (3,327) (3,383) Other (18,688) (22,038) (17,468) (21,312) Total (226,063) (171,488) (227,452) (174,703)

(*) Restatement according to Note 2 (e)(ii).

(1) These refer substantially to provisions for tax, civil and labor contingencies and provision for attorneys’ success fees (Note 11). A significant amount of the provision for civil contingencies includes the change in the price of B3-issued shares and the monetary contribution to be paid into the Fund for the Defense of Diffuse Rights, for the purpose of closing the administrative inquiry handled by CADE, whose proposal was included as part of the Consent Order filed on September 11, 2018 and approved, without considering the merits, on October 3, 2018.

19. Financial result

B3 Consolidated 2019 2018 2019 2018 Financial income Revenue from financial assets measured at fair value 513,080 442,203 521,590 451,387 Other financial revenues 39,828 44,995 40,295 45,138 Dividends on shares abroad 16,584 15,025 16,584 15,025 (-) PIS and Cofins on financial revenues (25,927) (23,687) (26,063) (23,827) 543,565 478,536 552,406 487,723

Financial expenses Interest on debt abroad (152,796) (152,264) (152,796) (152,264) Instrumento de hedge (52,590) (68,575) (52,590) (68,575) Funding interest - Debentures (134,939) (193,416) (134,939) (193,416) Funding interest - Loans and Financing (81,609) (86,879) (27,813) (26,222) Other financial expenses (51,817) (14,713) (54,486) (16,513) (473,751) (515,847) (422,624) (456,990)

Foreign exchange rate, net (73,147) (261,808) (22,877) (84,415)

Financial result (3,333) (299,119) 106,905 (53,682)

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated)

20. Segment information

Consolidated information based on reports used by the Executive Board for making decisions, comprising the following segments: Listed, OTC, Infrastructure for Financing and Technology, Data and Services. Due to the nature of the business, the Executive Board does not use any information on assets and liabilities by segment to support decision-making. 2019 Consolidated Technology, Infrastructure data and Listed OTC for financing service Total Revenue 3,819,487 875,563 460,234 752,472 5,907,756 Adjusted operating expense (544,943) (177,137) (310,581) (280,800) (1,313,461) Long-Term Incentive (64,149) (23,529) (14,000) (68,821) (170,499) Other provisions (114,769) (24,690) (6,463) (18,633) (164,555)

3,095,626 650,207 129,190 384,218 4,259,241

Depreciation and amortization (1,030,250) Equity pick-up 3,150 Financial result 106,905 Income tax and social contribution (625,842) Net income for the year 2,713,204

2018 Consolidated (*) Technology, Infrastructure data and Listed OTC for financing service Total Revenue 2,834,729 862,036 515,200 619,950 4,831,915 Adjusted operating expense (573,704) (196,733) (279,538) (169,969) (1,219,944) Long-Term Incentive (89,989) (27,793) (11,600) (21,842) (151,224) Other provisions (66,330) (17,014) (5,374) (20,258) (108,976)

2,104,706 620,496 218,688 407,881 3,351,771

Depreciation and amortization (953,105) Equity pick-up 2,147 Financial result (53,682) Income tax and social contribution (250,058) Impairment of assets (8,722)

Net income for the year 2,088,351

(*) Restatement according to Note 2 (e)(i)

21. Other information a. The balance of salary obligations and social charges in the consolidated refers mainly to the profit sharing (PLR) at December 31, 2019 - R$176,237 (R$165,656 at December 31, 2018); long-term incentive programs settled in cash (Matching) - R$12,251 (R$8,707 at December 31, 2018); charges on long-term incentive programs - R$123,893 (R$76,083 at December 31, 2018); 13th salary - R$29,971 and vacation - R$58,131 (R $ 53,693 at December 31, 2018).

B3 S.A. - Brasil, Bolsa, Balcão

Notes to Financial Statements December 31, 2019 and 2018 (In thousands of reais, unless otherwise stated) b. At December 31, 2019, the balance of taxes and contributions payable in the consolidated mainly refers to federal taxes and contributions - R$235,948 (R$46,454 at December 31, 2018) and withholding taxes and contributions payable - R$67,393 (R$71,656 at December 31, 2018). c. The balance of earnings and rights on securities under custody refers to dividends and interest on equity received from publicly-held companies to be transferred to custodian agents and by them to their customers, who hold ownership of the shares of these publicly-held companies at December 31, 2019, totaling R$69,897 (R$59,850 at December 31, 2018). d. B3 seeks in the market support from insurance advisors to establish insurance coverage compatible with its size and operations. The maximum insurance coverage taken out at December 31, 2019, according to insurance policies, is as follows:

Maximum Insurance line indemnit Amounts at risk, property damages, buildings and equipment 223,810 Civil liability 415,000 Guarantee (1) 5,132,656 Works of art 1,040 Total 5,772,506

(1) This refers to the provision of collateral to obtain the suspension of the tax debt enforceability.

22. Subsequent events

At the meeting held of March 5, 2020, the Board of Directors approved the following matters:

• Capital increase of B3 in the amount of R$9,000,000, through capitalization of part of the capital reserves, without issue of new shares, which now totals R$12,548,655;

• Distribution of additional dividends referring to the year ended December 31, 2019, totaling R$344.247, and allocation of extraordinary dividends to the retained profits and income reserve accounts, amounting to R$650,000; and

• Distribution of interest on equity referring to the period of 2020, totaling R$293,000.

• B3's Share Buyback Program, beginning on June 28, 2019 and ending on February 29, 2020. The limit in the number of shares that may be acquired by B3 is 21,7 million common shares, representing 1.1% of total outstanding shares.

* * *