ELECTRONIC TRADING

1

• ELECTRONIC TRADING
• Public tenders Acquisition of goods and
  services
• www.bbmnet.com.br

2

• Whats the electronic trading?
• Its an operating system developed with the use
  of information technology resources in order to
  execute electronic trades for the acquisiton of
  goods and services.
• The supplier presenting the best price wins
  (reverse trade)
• The negociation takes place in the internet
  www.bbmnet.com.br

3

• Electronic Pregão Legal Aid
• Law 10.520, July 17th 2002
• Art. 2º
• 1º The trading will be accomplished by means of
  the use of information technology resources, in
  specific regulamentation terms.
• 2º It will be empowered, in the Federal
  Government, States, Federal District and Cities,
  the a participation of stock exchanges in the
  operacional and technical support to the public
  organizations and entities promoter of that kind
  of trading, to the organizations and entities
  promoters of that type of trading, using resorces
  from information technology.
• 3º The exchanges referred in 2º must be
  organized under non profit civil societies with
  the plural involvement of brokerage houses that
  use the electronic unified trading system.

4

• How can it be used by the buying organization?
• The promoting Organization of the trading since
  it uses the system from the Exchange by means of
  a Technical and Operacional Cooperation
  Agreement, according to the standard model
  supplied by the exchange.
• No cost takes place for the buying Organization
• To see the necessity of a complementary
  Legislation

5

• Credentialing
• Are credentialed with keys and passwords which
  are personal and instransferable
• Trading Promoting Organization(buyer)
• COMPETENT AUTHORITY - optional
• PRESIDENT OF THE TENDER COMISSION
• TRADER AND SUPPORT TEAM(Trading coordinators)
• Brokerage House
• LEGAL SUPPLIER REPRESENTATIVE (bidder)
• Regional of the Bolsa Brasileira de Mercadorias
• REGIONAL SUPERINTENDENT

6

• Attribution Profiles
• Competent authority
• Point out the Comission President (optional)
• Tender comission president
• Point out the trader and support team
• Divulge the edict
• Trader and support team
• Coordinate the trading with the support team
  assistance
• Brokers
• Offer initial price offer, tenders and show
  interest in interposing resources
• Regional BBM superintendent
• Aproves the interested bidder registering
  documentation before the trading

7

• Whats the scope of the trading?
• Can acquire products or services by trading
  means
• Federal Government
• The States
• The Federal District
• The Cities and Cities Consortiums
• Special Funds
• The Autarchies
• The Foundations
• The Mixed Economy Societies
• Companies controlled direct or indirectly by the
  Federal Government, States, Federal District and
  Cities

8

• How do suppliers participate?
• Any person or legal person that fullfil the
  conditions in the edict can participate
• A previous credentialing is necessary with na
  Exchange Regional, by means of a brokerage house,
  up to 1 hour before the deadline to start the
  trading (its checked by the BBM superintendent)
• All the functionalities provided by the system
  are executed by a brokerage house associated by
  an account and supplier order.
• The offers and bids occur by electronic means
  through the broker which is properly
  credentialized in the exchange(with the brokers
  own password)

9

• Who defines the rules?
• Only the promoting organization of the trading
  (buyer) defines in the edict the pregão
  conditions. They are
• Tender object
• Habilitation requirements
• Criteria in offer acceptance
• Sanctions
• Contractual terms
• Supplying Due date
• Participation condicions
• Trader nomination and support team
• Other

10

• Who coordinates the trading?
• The trading coordenation responsability is
  exclusive the bidders with the assistance of the
  support team pointed by the promoting Public
  Organization (buyer)
• All the coordination functionalities are run by
  electronic means as well
• The system provides a chat in order to provide
  exchange of information between the trader and
  all participants.

11

• What are the advantages?
• Better prices
• No operacional costs to the trading promoting
  organization
• Active participation of the brokerage houses as a
  business promoter
• Very low index of contestation and recurring
• Transparency
• Agility in the recruitment agility
• Simplification of the tender process
• Easily-accessible public session
• Operating system fast, safe and user-friendly
• Involvement of distant providers
• Inhibits the formation of cartels

12

• What can be acquired through the
• trading ?
• Common goods and services that can be
  standardized and precisely defined in the edict
• Examples vehicles, machinery in general, medical
  equipment, medicine, food, computer supplies,
  school materials, household appliances, air
  passages, food vouchers, cleaning and preserving
  services, specialized consultancy, vigilance,
  fuel, seeds, saplings, surgical material,
  electric components, materials for constructing
  roads and others.

13

• How does the operacional system work?
• It works via the internet, using resources such
  as cryptography and authentication.
• Registering of participants
• Opening and acceptance of inicial price offer
• Arrengement of the offers
• Competitive fase successive tender
• Automatic closing by time randomly (optional)
• Winner indication
• Opening of a deadline in order to allow recurring
• Adjudication
• Habilitation
• Electronic minute

14

• Other functionalities?
• The system allows the buying Public Organization
  to choose among some functionalities fixed in the
  edict
• Use of the bidder disqualification criteria which
  presented offers with values greater than 10
  from the best
• The random closing can occur automaticaly by the
  system from 0 to 30 minutes randomly after set by
  the trader
• Hiding the names of suppliers envolved
• Offers by percentage of decreasing discounts
• Offers in negative values
• The electronic system is hosted at BMF Sao
  Paulo

15

• How is the payment accomplished?
• Financial liquidation via the Exchange
• Direct liquidity Buyer supplier
• The Exchange charges a fee for the use of the
  system.

16
01 Preparatory phase - Registering
ADHERENCE Technical Cooperation term

• INDICATIONS- RESPONSIBLE
• TRADER
• SUPPORT

PASSWORDS

• REGISTERING
• PROCURATION
• STATEMENT
• CATALOG

SUPPLIER REGISTERING
EDICT REVELATION 8 DAYS BEFORE
EDICT

• INICIAL PRICE OFFER
• PRODUCT/SERVICE CATALOG

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02 Competitive phase - Negotiation
BID 01

• COORDINATION
• TENDER OPENING
• BID ORDERING
• COUNTER-BID OFFERING
• RANDOM CLOSING OR NOT
• WINNER INDICATION
• RECURRING DEADLINE OPENS

BID 02
18
03 - Fechamento
PAYMENT
REPASS
ABJUDICATION
DOCUMENTS FOR HABILITATION
CONTRACT
DELIVERY
19

• Software requirements
• Internet explorer 5.0 or higher
• Netscape 4.5 or higher
• Configuração de 128 bits
• Java version 3805 or higher

20

• Who uses the Pregão da Bolsa?
• Mato Grosso do Sul state government
• Mato Grosso state government
• Ceará state government
• Santa Catarina state government
• Goiás state government
• Itaipu hydroeletric dam

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• The Bolsa Brasileira de Mercadorias Structure
• Non profit civil association
• Social chart composed by 375 brokerage houses in
  Brazil
• Headquarters in Brasília DF