B3 S A Brasil Bolsa Balcão : Annual Report

2023 Annual Report

B3, the Brazilian Stock Exchange

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GETTING STARTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Contents

About the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Materiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Message from the chairman of the board of directors . . . . . . . . . . . . 9

Message from the CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Highlights and recognition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

THE BRAZILIAN STOCK EXCHANGE . . . . . . . . . . . . . . . . . . . . . . . . . 16

Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

ADVANCES IN THE OPERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Core business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Diversification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Enablers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Financial and operational performance . . . . . . . . . . . . . . . . . . . . . . . . . . 36

GOVERNANCE AND ETHICAL ACTION . . . . . . . . . . . . . . . . . . . . . . . 42

Value creation model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Corporate governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Responsible market infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Risk management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

2023 ANNUAL REPORT

ENVIRONMENTAL AND CLIMATE APPROACH . . . . . . . . . . . . . . . 70

Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

Climate governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

Climate strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

Risks and opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Metrics & targets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Natural resource management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

SOCIAL APPROACH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

People management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Diversity, equity and inclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

Sustainability-Linked Bond (SLB) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

Social responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

SUPPORTING THE MARKET ON ITS ESG JOURNEY . . . . . . . . 108

Market and regulators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

Events, training programs and guides . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

Institutional pacts and commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

ESG PRODUCTS AND SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118

Listed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120

Over-the-counter (OTC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

Technology, data and services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

TO CONSULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

GRI and SASB Content Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

Letter of Assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

Credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140

Getting started

GOOD PRACTICES ADOPTED IN THE 2023 REPORT

About theReport

[ GRI 2-1; 2-3; 2-5 ]

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Prepared based on the study of materiality;

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Compliance with the main Corporate Reporting standards;

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Prepared with the participation of senior leadership, including the CEO, the entire statutory board and the chairman of the Board of Directors;

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Provided with limited external assurance;

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Timely publication - in the first quarter of 2024.

Our annual report has two main purposes: internally, it is a management tool whose preparation process helps identify risks and opportunities; externally, it is an instrument of transparency and accountability aimed at all the audiences with which we interact.

In the document, we seek to present a complete view of our activity, going beyond financial performance. For this purpose, we address ESG (acronym for "Environmental, Social and Corporate Governance") aspects in an integrated manner with the business.

Throughout the material, we address topics such as:

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Our value generation model;

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Risks and opportunities relating to sustainability and climate change;

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Positive and negative impacts of the operation; and

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Management of these impacts.

COMPLIANCE WITH RULES, PRINCIPLES AND COMMITMENTS

To give consistency and comparability to the material, we have structured its contents based on the guidelines of the main reporting standards in the world .

We continue build our report in reference to the GRI (Global Reporting Initiative) standard, which is the most recognized standard for presenting an organization's impacts .

We have also considered standards that we already followed for preparing B3's annualreport, such as the International Integrated Reporting Framework (published by the Integrated Reporting and Connectivity Council, or IRCC), the SASB (Sustainability Accounting Standards Board) and the recommendations of the Task Force on Climate-related Financial Disclosures, or TCFD (incorporated by IFRS S2 from 2024) .

Finally, we also used the Sustainable Development Goals (SDGs), a global movement led by the United Nations (UN), as a reference .

HOW TO BROWSE THROUGH THE REPORT

To facilitate the reading and analysis of information in the Annual Report, we provide a series of visual and editorial resources, which are structured with reference to the IIRC .

For example, we identify, by means of icons (see on the side), which Integrated Reporting capitals are being considered in a given chapter of the report .

We also show, throughout the document, the GRI, SASB contents that are met by each section or paragraph .

We have also prepared a GRI and SASB Summary at the end of the Report, which not only informs in which part of the report an indicator is addressed, but also correlates the content with the SDGs and the Global Compact .

Finally, for those looking for ESG performance tables1 and more extensive historical series, we provide complementary content, which can be accessed here .

Financial Capital

Natural Capital

Human Capital

Manufactured

CapitalSocial and Relationship CapitalIntellectual

Capital

WE ARE ALL EARS!

The changes shown in this report are part of our continuous improvement effort. If you have suggestions and comments or are looking for additional information, please contact us at

[e-mail]

1 . The content of the ESG Performance Table was not included in the limited assurance activity .

GETTING	THE BRAZILIAN STOCK	ADVANCES IN THE	GOVERNANCE AND	ENVIRONMENTAL AND	SOCIAL	SUPPORTING THE MARKET	ESG PRODUCTS
STARTED	EXCHANGE	OPERATION	ETHICAL ACTION	CLIMATE APPROACH	APPROACH	ON ITS ESG JOURNEY	AND SERVICES

Materiality

[ GRI 2-14; 2-29; 3-1; 3-2; 3-3 ]

At B3, we structure our annual report based on the Company's materiality survey, whose purpose is to identify, from the point of view of management and stakeholders, the most material topics for the sustainability of the business.

In accordance with this periodicity, we reviewed our materiality in 2022. The process consulted six groups of strategic stakeholders, defined based on our relationship sphere and internal policies:

Customers	Suppliers
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Employees	Investors
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Regulators	Society
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The process used a methodology that follows the recommendations of GRI and SASB.

The work was divided into three stages:

STAGE 1 Mapping of potentially material topics, based on three criteria: (i) global, domestic and industry trends; (ii) benchmarking with other stock exchanges; and (iii) our previous materiality matrix (from 2020).

STAGE 2 Identification of the materiality of each subject through two instruments: (i) interviews with B3 and Banco B3 executives for in-depth analysis; and (ii) online surveys and secondary surveys to capture spontaneous mentions to ESG topics in the routine of our dialogue and engagement with stakeholders.

STAGE 3 Hierarchy of topics by materiality, based on the application of a mathematical classification to the data obtained in the previous stages.

After completing the materiality process, the result of the survey was analyzed and approved by the leadership, in a meeting of the Joint Executive Board, with participation of the CEO .

Understanding the issues that matter to our stakeholders is a challenge that helps us identify risks and opportunities, adjust our strategies, promote improvements in services and processes, and map the most material SDGs for the business .

TO CONSULT

OUR STAKEHOLDERS AND EXAMPLES OF ENGAGEMENT AND DIALOGUE CHANNELS AND PRACTICES2

Stakeholders

Engagement and dialogue channels and practices

Frequency

Holding of Events

Atende B3 Advisory Chambers

Annual, monthly, bimonthly or quarterly, depending on the chamber

Continuous Continuous

Customers

Social Media

Public consultations NPS

Responses to ESG rating agencies and market indices B3 Day

On demand Semesterly Continuous Continuous Annual

Investors

Conference calls Shareholders' Meeting Engagement Survey Volunteering ActionsQuarterly Annual Annual Continuous

Employees

Intranet

Internal Communications (Comunica) Participation in forums and working groups HUB3

Education Hub

Society

Social Media

RegulatorsSuppliers

ESG Newsletter

Bora Investir "Lets Invest" Minuto B3

Participation in public consultationsParticipation in forums and working groups ESG Good Practices Questionnaires

2 . Our Reporting Channel, "Alô" Compliance, can be used continuously by all audiences .

Continuous Weekly Continuous Continuous ContinuousContinuous Continuous Monday to Friday On demandContinuous ContinuousWeekly

MATERIAL TOPICS

Our materiality includes four highly material topics .3 Check these topics below and how they relate to the SDGs, our sustainability strategy and potential externalities .

Addresses the Company's dual role in seeking to engage the market in its ESG journey, while at the same time promoting responsible internal management of its own activities . Includes topics such as relationships with stakeholders; environmental and climate management; corporate governance, diversity and inclusion; effective and accurate disclosure of financial and non-financial information; and disclosure and transparency of ESG information . It also covers the promotion of financial education and the search for bringing Individual investors closer to B3, enabling a more accessible capital market .

ESG management and induction of good practices among our stakeholders

PILLAR I. Being a Company aligned with the best sustainability practices

PILLAR II. Inducing good ESG practices in the Brazilian Market

PILLAR III. Strengthening the product Portfolio and opening new ESG market fronts

Negative: use of natural resources inefficiently or from polluting sources (e g. . origin of the energy consumed) .

Positive: governance bodies being involved in strategic decisions on the topic, impacting the entire Company and contributing to ESG issues being addressed strategically .

Responsible market infrastructure

Addresses internal practices, standards and procedures that strengthen the Company's responsible management . Covers risk management; business integrity (which includes managing conflicts of interest, ensuring compliance with local regulations and anticorruption practices); business continuity; resilience of platforms and operational infrastructure, information security; integrity and confidentiality of individual data; cyberattack prevention, and supply chain management .

PILAR I. Being a Company aligned with the best sustainability practicesNegative: failures in supplier management processes can directly impact B3's image and operations .

Positive: solid and robust anticorruption practices; information security practices; risk practices; operational controls adopted by the Company contribute to responsible internal management and mitigation of negative impacts arising from risks that may materialize .

People management and Impacts on Society

Refers to the contribution to the development of employees and society . From an internal perspective, it covers human capital, in matters of attraction and retention; offering professional development opportunities; health and safety, and building a diverse and inclusive Company . From an external perspective, it concerns our impact on society through the voluntary and planned transfer of private or incentivized resources to social and cultural projects .

PILAR I. Being a Company aligned with the best sustainability practicesNegative: market acceleration can contribute to greater voluntary turnover of our people .

Positive: financial contribution coordinated by B3 Social to support public education and emergency situations and empowerment of women through diversity actions .

Products and services for a more sustainable market

It concerns the integrated management of customer demands, operational improvements, innovation and the development of new products, including those related to ESG and climate issues . It also covers offering products and services that promote sustainable development in the capital and financial markets, in the core business and adjacent businesses, aiming to promote best practices and encourage transparency .

PILAR II. Inducing good ESG practices in the Brazilian Market

PILLAR III. Strengthening the product Portfolio and opening new ESG market fronts

Negative: individual investors may not properly understand the products and end up suffering an impact on their financial health .

Positive: Sustainability indices can contribute to market engagement and increase in relation to the topic and, consequently, with the SDGs in question .

3 . External pacts and commitments related to B3's materiality are listed on page 117 . The Social, Environmental and Climate Responsibility Policy (PRSAC) has guidelines that cover all issues present in the materiality study and can be accessed on the Investor Relations website . To prevent and mitigate impacts, we rely on risk management procedures described on page 61 .

Actual and potential impacts, as well as negative and positive impacts, when identified, are listed throughout the report . Every month we monitor a dashboard with key ESG indicators to track the performance of the topic in the organization . The indicators are correlated with the PRSAC sustainability strategy, materiality and guidelines .

GETTING	THE BRAZILIAN STOCK	ADVANCES IN THE	GOVERNANCE AND	ENVIRONMENTAL AND	SOCIAL	SUPPORTING THE MARKET	ESG PRODUCTS	TO
STARTED	EXCHANGE	OPERATION	ETHICAL ACTION	CLIMATE APPROACH	APPROACH	ON ITS ESG JOURNEY	AND SERVICES	CONSULT

Message from the chairman

of the Board of Directors

Over the past few years, we have sought to articulate B3's medium and long-term strategy in a clear and objective manner, aiming to guide a solid performance and disciplined execution of our initiatives over time, both in favorable moments and during periods of market turbulence in which we operate.

In 2023, we were able to put this vision to the test. We had a year marked by a challenging global scenario - from an economic standpoint and relevant geopolitical issues. This had impacts on various aspects of our operation and the activity levels of our clients, especially in the listed market.

Faced with these challenges, we sought to advance in our journey and reinforce the fundamentals and conditions for the Company to continue presenting robust and sustainable performance.

On one hand, we demonstrated discipline in executing the expense budget. On the otherhand, we made strategic capital allocations to progress in the two priorities of our strategic planning: strengthening the core business and diversifying operations with new businesses.

This work included investments in technology and infrastructure, such as modernization initiatives for clearing, the depository center, and the fixed income trading platform; the completion in the second quarter of the acquisition of Neurotech, a technology company specializing in artificial intelligence, machine learning, and big data solutions; a corporate investment in MBOCHIP, to further enhance the quality of product and service offerings; and the launch of new businesses, such as B3 Digitas, focusing on offering infrastructure for digital assets.

Another noteworthy move in the last year was the intensification of proximity with our clients, which is important for improve understanding and meeting demands and supporting market

[ GRI 2-22 ]

development and sophistication. Measures such as the launch of a solution for trading large lots and the comprehensive reformulation of the customer service model were part of this initiative.

We want B3 to continue to be perceived as the most efficient option for all sectors served by our market infrastructure.

With closer client engagement, discipline in capital usage, and selective strategic diversification, the Company's business model has proven increasingly resilient and maintained activity at high levels, even in complex scenarios.

Board of Directors' performance

To ensure this journey of sustainable and long-term growth, the Board of Directors has organized its responsibilities around four themes: strategic guidance of the business; allocation of financial and human resources;

Antonio Quintella Chairman

GETTING	THE BRAZILIAN STOCK	ADVANCES IN THE	GOVERNANCE AND	ENVIRONMENTAL AND	SOCIAL	SUPPORTING THE MARKET	ESG PRODUCTS
STARTED	EXCHANGE	OPERATION	ETHICAL ACTION	CLIMATE APPROACH	APPROACH	ON ITS ESG JOURNEY	AND SERVICES

TO CONSULT

evolution of governance processes; and focus on people development.

In guiding business strategy, we have been constantly deepening our understanding of the market and future opportunities to guide executive management decisions increasingly assertively, both regarding the core business and adjacent activities. Additionally, we have encouraged the strengthening of innovation as one of our strategic growth pillars.

Based on this work, we have agreed with management on the allocation of resources to achieve medium- and long-term strategic objectives. We have taken significant steps in recent years, with adequate capital allocation, allowing for quite substantial results, as demonstrated on the following pages of this report.

We closely monitor the company's governance, which has been subject to ongoing evolution. This work allowed, for example, B3 to be recognized in 2023 as the best company in the country in environmental, social, and governance practices by the Época Negócios 360º yearbook.

The Company has also evolved in its careful focus on people. We understand the importance of having talents capable of meeting today's and future challenges and aim to offer an inclusive environment with numerous professionaldevelopment opportunities.

In this context, we have developed new practices of diversity, equity, and inclusion. As a result, we were recognized among the best companies to work for in the Financial Services sector and in the Technology area, according to the Great Place to Work (GPTW) ranking. Additionally, for the first time, we were awarded by GPTW in the Ethnic-Racial category.

We have also sought to identify development opportunities within the Board itself, making its composition more diverse. With this, we have made progress in the diversity of profiles and competencies of the members that make up the Board of Directors, with the aim of directing the Company's strategy more efficiently.

Commitment to good practices

Throughout the year, we have taken important steps in inducing better market practices. One highlight was the approval by CVM of the ASG Annex, which presents proposals to stimulate gender diversity and the presence of underrepresented groups in senior leadership positions.

We have also made progress in our social agenda. Through B3 Social, we invested R$ 68 million in 258 projects throughout Brazil, focusing on structural initiatives in education. Thus, with arecord investment in our history, we estimate that we have impacted more than 16 million people.

Finally, it is important to highlight the financial results and dividend distribution in the period. Even in a demanding scenario, gross revenue reached R$ 9.9 billion, and net income reached R$ 4.1 billion. Therefore, we distributed

R$ 5.0 billion to shareholders and repurchased shares, with a payout of 122%, in line with our commitment to shareholders.

In 2024, we will continue to evolve in our strategic journey through strengthening the core business, allied with the selective expansion and diversification of our businesses, with a priority focus on data and analytics. We aim to be increasingly closer to our clients to meet their expectations and bring more sophistication and security to the market. With this, we are convinced that we can build a successful future.

Antonio Quintella

Chairman of the Board of Directors