BME and MiFID

Brussels, October 24 2007

2

2.670

1.2721.025

696523 458

3.0432.906

1.395

1.049 944 840

Turnover Capitalisation

Key operator in Europe 2007 european stock exchanges – Spain, 4th Exchange by size

> BME ranks 4th in equity turnover

Billions €

Place 1o 2o 3o 4o 5o 6o

Source: federation of European Stock Exchanges (FESE). 30/04/2007

3

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

20.000

22.000

DB

NYSE/ENXT

CME

HKEIC

E

CBOTASX

LSEBM

EOM

X

NASDAQTSX

ISE

HELEX

BME Versus Other Exchanges (capitalisation)

Source: BME, 06/06/07

€ Mill.

4

Source: FESE, Share Ownership Structure in Europe

5

Source: FESE, Share Ownership Structure in Europe

6

1.Liquidity

2.Technology

3.Cost

Three drivers for future

7

EVOLUTION 2007 / 2006 (SEPTEMBER) turnover and trades

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

35,00%

40,00%

45,00%

50,00%

55,00%

60,00%

65,00%

70,00%

75,00%

Turnover Nº trades

Turnover 54,36% 46,03% 57,54% 40,07% 43,23% 32,27%

Nº trades 59,36% 32,25% 60,84% 45,07% 72,11% 53,78%

BME BORSA ITALIA DEUTSCHE BORSE Euronext LSE OMX

Source: Borsa italiana, Deutsche Börse, Euronext, London Stock Exchange, OMX y BME.

Turnover has been growing above the european average. SIBE turnover growth reaches 22% CAGR between 1999-2006

8

Spanish corporate dynamism

Market capitalisation (bill. €)Market capitalisation (bill. €)and euro zone rankingand euro zone ranking

Telecomunic.Telecomunic.

BanksBanks

Oil & PetrolOil & Petrol

UtilitiesUtilities

Textile Textile /Distrib./Distrib.

9

6

6

7

10

6

2

0 15 30 45 60 75

89

83

67

33

42

50

29

14

0 30 60 90 120

n.a.

#11

#10

#4

#5

#7

#4

#1

#6

#3

#6

#3

#1

#1

May 1996May 1996 May 2007May 2007

> Spanish companies have increased significantly their international presence through M&A, multiplying by nine the market cap and by more than twenty the turnover since 1996

Top 8: Top 8: 407.8 bill. € 407.8 bill. € Mket. cap.Mket. cap.468.9 bill. €468.9 bill. €

TurnoverTurnover(jan-may.)(jan-may.)

Top 8 :Top 8 :46.0 bill. €46.0 bill. € Mket. cap. Mket. cap. 21.6 bill.€ 21.6 bill.€ TurnoverTurnover

(jan.-may.)(jan.-may.)

#5 #3TransportTransport

Source: Bloomberg

9

1 174,8 1,18 3,86%

2 151,4 1,02 3,31%

3 141,2 0,95 2,86%

4 117,7 0,80 2,90%

5 106,0 0,73 2,81%

6 104,5 0,71 3,50%

7 100,4 0,68 3,00%

8 98,9 0,67 3,12%

9 97,8 0,67 3,69%

10 90,1 0,61 0,82%

16 70,1 0,47 1,74%

25 49,8 0,34 0,98%

RK.RK. CompanyCompanyJanuary-Jul 2007January-Jul 2007

ValueValue (€ Bn.) (€ Bn.)

Daily AverageDaily AverageValueValue

(€ Bn.) (€ Bn.)

Source: Bloomberg(1) As of 07/31/07

Relative Weight in Relative Weight in EuroStoxx50 (%)EuroStoxx50 (%)(1)(1)

Highly liquid market spanish blue chips are the stocks with highest liquidity at UEM

10

> Highest-ever trading volumes on equity market (+61,6%)

> Record order volumes for a single trading day (28 feb)

> Technological capacity of SIBE increased threefold in January

> Advanced in the launch and trading of ETFs

> Consolidation of MAB as the market for SICAVs

> Record number of processed orders in 1Q 2007 : 19.2 Mill. (up +48.1 % from 1Q 2006)

Equity Turnover (SIBE)Equity Turnover (SIBE)

+

35.6%

+62%

Billion €

Equity market: High growth in turnover

Source: BME

494,3

636,9

850,4

1.153,5

531,9

859,3

2003 2004 2005 2006 1S/06 1S/07

11

81,196,6

122,0

194,4

288,9

170,7

18,4% 19,5% 19,2%22,9%

39,2%43,6%

2002 2003 2004 2005 2006 2007(*)

% total shares traded

Spanish market historical growth “mid-caps” contribution to the increasing turnover

> Several spanish “mid-caps” are actively investing abroad and issuing shares in order to finance non-organic growth.

Turnover, excluded top ten stocks (bill.€)

Mid and small market cap turnoverMid and small market cap turnover

(*) Jan. - May. 07

Source: BME

12

Highly liquid market BME: The Principal Market for Spanish Shares

> BME’s solid background and high liquidity makes BME the principal market for Spanish stocks

> During last years, BME has preserved and expanded spanish shares trading

5,20%

2,80%1,60%

5,90%

2,40%1,30% 0,80% 0,60% 0,60% 0,56%

13,63%

7,50%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

%

Weight of trading in Spanish SharesWeight of trading in Spanish Sharesabroad versus total traded in BMEabroad versus total traded in BME

Source: BME(1) Increase due to Terra Networks Nasdaq’s listing

(1)

13

14

International comparative of liquidity European indexes Efective Spreads

0,000%

0,050%

0,100%

0,150%

0,200%

0,250%

0,300%

0,350%

0,400%

0,450%

HO RQ UILLA INDICE 0,183% 0,191% 0,196% 0,184% 0,407%

HO RQ UILLA 30 VALO RES > PO NDERACIO N 0,183% 0,185% 0,190% 0,184% 0,317%

Alemania (DAX 30)

España (IBEX 35) Francia (CAC 40) Italia (MIB 30)Reino Unido

(FTSE 100)

FOR EACH INDEX:

FIRST COLUMN: EFECTIVE SPREAD OF

THE INDEX.

SECOND COLUMN: EFECTIVE SPREAD OF THE 30 MOST LIQUID STOCKS OF EACH INDEX.

15

State-of-the-Art TechnologyCompetitive and In-House Developed Technology

> High performance; above 99.9% of availability> Full on-line, back up systems> Equity platform capacity increased three fold (January 2007)

Reliable

> Capacity to absorb growing trading volumes> Increasing sales of BME’s in-house systems

Competitive

> BME was the first international stock market to interconnect different stock exchanges (Madrid, Barcelona, Bilbao and Valencia) in 1989

Pioneer

> In-house development:

I) providing IT solutions for the entire value chain

II) flexibility: fully customised, quick update and risk preventionIn-house

16

Competitive Fee Structure

Exchange Fees By Country 2006Exchange Fees By Country 2006

Exchange Fees By Country 2006

0.47

0.38

0.51

0.39 0.40

0.520.46

0.42

0

0.1

0.2

0.3

0.4

0.5

0.6

France Germany Italy Spain Canada U.K. Sells U.S.A.NYSE

U.S.A.NASDAQ

Source: Institutional Investor & Elkins/McSherry

Bas

ic P

oint

s

17

Fees Comparison

Exchange Fees By Country 2006 (< 1 Basic Point)Exchange Fees By Country 2006 (< 1 Basic Point)

0.9

0.69 0.68 0.67 0.66 0.65

0.54 0.52 0.510.47 0.46

0.42 0.42 0.4 0.4 0.39 0.38 0.380.32 0.3

0.160.09

0.050.01

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Austr

alia

Finlan

d

Switz

erlan

d

Swed

en

Austr

ia

Denm

ark

Belgi

um

U.K.

-- Se

llsIta

ly

Fran

ce

U.S.

-- NY

SE

Arge

ntina

U.S.

-- Na

sdaq

Cana

da

Neth

erlan

dsSp

ain

Germ

any

Irelan

d --

Sells

J apa

n

New Z

ealan

d

Luxe

mbour

g

Portu

gal

Norw

ay

Mexico

Source: Institutional Investor & Elkins/McSherry

Bas

ic P

oint

s

18

0

5

10

15

20

25

30

35

40

New Z

ealan

d

Denm

ark

Norw

ay

Austr

alia

Irelan

d --

Sells

Portu

gal

Swed

en

Belgi

um

Austr

iaIta

ly

Switz

erlan

dSp

ain

Neth

erlan

ds

U.K.

-- Se

lls

Cana

da

Fran

ce

Germ

any

U.S.

-- Na

sdaq

Japa

n

U.S.

-- NY

SE

Source: Institutional Investor & Elkins/McSherry

Market Impact

Exchanges Fees

Average commissions

Fees Comparison

Total Cost By Country 2006 (< 35 Basic Point)Total Cost By Country 2006 (< 35 Basic Point)

19

MiFID aspects for Exchanges

> Pre Trade Transparency

> Post Trade Transparency

> Best Execution (for Investment Services Firms)

> Transaction Reporting (special requirements for CNMV)

> Orders large in scale

> Deferred publication of Blocks

> Competitors: Sistematic Internalisers and MTFs

20

Excellent relation liquidity, cost and technology

Strong Competitive position in Best Execution

STP process in trading+settlement

Risk in market fragmentation due to new competitors IS and MTFs

But also new oportunities in data information, market access and client servises.

BME and MiFID