EL PROCESO FENTON A ALTA TEMPERATURA

DATE OF GROSS NET (ORDINARY OR (THOUSAND

YEAR PAYMENT AMOUNT AMOUNT EXTRAORDINARY) RATE EUROS)

2006 26-jan-06 0.2923 0.248455 Ordinary (Interim) 24,441

2006 03-may-06 0.3264 0.2774 Ordinary (Supplementary) 27,293

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with a 1.2% reduction in operating costs, meant that EBITDA for 2006 was 46.2% higher than the year before, at 96,659 thousand euros. Equity trades totalled €1,153,532 up by 35.6% over 2005, with 22.9 million trades (+34.2%). The aggregate rate for trades in the warrants and certificates market was 34.1%, and 36.5% in terms of the number of trades, totalling €2,966 million and 0.48 million trades.

Furthermore, during the year, ETFs began to be listed. At the year end there were three on Ibex 35® and one on Eurostoxx 50.

The Ibex 35® index, a selective index of the trend in the Spanish stock market and underlying trading in derivatives, has continued to break all-time records throughout the year.

Market capitalisation for equities at the end of 2006 was €1,134,137 million, 32.6% higher than at the end of 2005.

● _{The Settlement BU Revenues for 2006 totalled 61,765 thousand euros (+12.2%). Operating costs increased by 1.3%}

to 13,895 thousand euros, and EBITDA rose to 47,870 thousand euros (+15.8%).

The number of operations settled in 2006, including equities, private fixed income and government debt, increased by 19.8% compared to 2005, to 10.2 million.

The nominals recorded, for the three markets together, rose by 19.3% compared to the year before, to 1,048.1 billion euros at the end of 2006.

● _{The Listing BU At the year end this BU recorded 15,960 thousand euros (+11.1%) in EBITDA, having brought its}

costs down to 9,742 thousand euros (-0.3%) and increased earnings to 25,702 thousand euros (+6,5%). The capitali- sation of the companies listed on the markets managed by BME as at 31 December 2006 totalled €1,134,137 million (+32,6%). During the year, companies have been progressively included in the Alternative Stock Market. By the year end, 2,405 companies had been listed on this market.

There have been 10 IPO and/or subscriptions in all during the year, with an effective volume of €3,104 million. Listings on the AIAF private fixed-income market totalled €508,254 million, 23.4% higher than in 2005.

LISTING BU (THOUSAND EUROS) 2006 2005 CHANGE 2006-2005

Income 25,702 24,139 6.5%

Expense 9,742 9,769 -0.3%

EBITDA 15,960 14,370 11.1%

SETTLEMENT BU (THOUSAND EUROS) 2006 2005 CHANGE 2006-2005

Income 61,765 55,070 12.2%

Expense 13,895 13,715 1.3%

EBITDA 47,870 41,355 15.8%

EQUITY BU (THOUSAND EUROS) 2006 2005 CHANGE 2006-2005

Income 130,683 100,580 29.9%

Expense 34,024 34,449 -1.2%

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● _{The Information BU Earnings in 2006 totalled 26,846 thousand euros (+35.6%), with EBITDA totalling 19,503 thou-}

sand euros (+56.3%). The increased content offered by the information unit and harmonising the pricing policy with the policies of the major international benchmark markets has made for a 3.4% increase in the number of customers and 10.4% more end users of real-time information. This has meant that the business unit has recorded record levels of revenues compared to the same period in 2005.

● _{The Derivatives BU In 2006, this BU made 47.1 million contracts (+17,5%), with growth recorded for all the different}

types of trade: indexed futures (+29.9%), Mini futures (+39.5%), indexed options (+25.0%), share futures (+12.8%) and share options (+13.8%).

The open position stood at 5.7 million contracts as at 31 December 2006, 7.9% higher than on the same date in 2005.

At the end of 2006, the earning accumulated by the Unit were up by 16.3% compared to 2005. This, combined with a 1% decrease in operating costs, put EBITDA for the business unit at 12,858 thousand euros (+36.8%)

● _{The Fixed-Income BU During 2006 the Fixed Income Unit became stable. Marginal increases in revenues (+0.2%)}

and operating costs (+0.5%) have meant that EBITDA remained virtually unchanged at €3,027 and €3,028 thousand, respectively. The total for Government Debt traded during 2006, using the SENAF electronic platform, was €179,185 million (-22.5%), although one should mention the major increase in maturity trades (+55.1%). Private fixed-income trading in 2006 totalled €900,652 million (+3,2%), and other fixed-income trades on the stock market totaled €92,727 million (-0.2%), in the year.

● _{The Consulting & IT BU The IT & Consulting BU recorded earnings for 2006 totaling 12,212 thousand euros (+33.1%)}

and EBITDA totaling 4.452 thousand euros (+68.3%). The most significant growth was achieved in consulting (+38.6%), routing-trading solutions (+27.4%) and in services to members and issuer (+69.3%).

CONSULTING & IT BU (THOUSAND EUROS) 2006 2005 CHANGE 2006-2005

Income 12,212 9,177 33.1%

Expense 7,760 6,531 18.8%

EBITDA 4,452 2,646 68.3%

FIXED-INCOME BU (THOUSAND EUROS) 2006 2005 CHANGE 2006-2005

Income 6,348 6,334 0.2%

Expense 3,321 3,306 0.5%

EBITDA 3,027 3,028 0.0%

DERIVATIVE BU (THOUSAND EUROS) 2006 2005 CHANGE 2006-2005

Income 23,955 20,602 16.3%

Expense 11,097 11,205 -1.0%

EBITDA 12,858 9,397 36.8%

INFORMATION BU (THOUSAND EUROS) 2006 2005 CHANGE 2006-2005

Income 26,846 19,796 35.6%

Expense 7,343 7,319 0.3%

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Particularly worthy of mention are the following:

● _{Implementing the MiFID Directive may lead to greater competition and have an adverse effect on BME's current level}

of turnover.

● _{Most of BME's earnings come from just two business units (equity and clearing and settlement).} ● _{BME's activity is linked to economic cycles and the current economic situation, above all in Spain.}

● _{Most of BME's earnings come from operations on securities in a small number of issuers and a small number of}

members of the market and participants in the clearing and settlement systems.

● _{Risks connected with the function as central counterparty in transactions in derivatives.}

The improvement recorded in 2006 does not necessarily mean that similar or better results will be achieved in future years.

2. Post-balance-sheet events

No significant events have occurred subsequent to the closing date that are not reflected in the annual financial statements of BME.

Set out below are the events most worthy of note up to the date the annual accounts were drawn up:

● _{Payment of an interim dividend on account of consolidated income for 2006 totalling €50,002 thousand, a dividend of}

€0.598 per share.

3. Outlook for the Company

3.1 MARKET ACTIVITY

Activity in the markets continues to expand. Thus, increases in trading volumes were reported in all of the markets in which BME operates were reported in January. If this trend is confirmed, performance in 2007 would once again impro- ve on those for the previous year, and on budgeted results. The Company remains determined to keep growth in expenses down below the limits set in the annual budget.

3.2 NEW PROJECTS

In the coming months, BME will embark upon the following projects, which will result, on the one hand, in a higher level of activities and revenues and, on the other, in a more complete business proposal of products and services aimed at the financial community:

● _{Development of the ETF segment (Exchange Traded Funds), introducing a larger number of Ibex 35® indexed funds}

and other indexed funds linked to Eurostoxx 50 or Latibex.

● _{Introduction of futures and options on EuroStoxx 50 shares.}

● _{Development of a specific offer of services relating to the MiFID Directive.}

● _{Expanding MAB activity extending to investment funds and thin-capitalised companies.}

● _{Development of services for the OTC market. With the aim of exploiting the scenario outlined by Basel II, new needs}

for the calculation, control and diversification of risks will be examined with a view to developing technological and financial solutions which will be offered to participants in this market.

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4. Research and development activities

BME continues to build upon its vocation of technological innovation and improvement. As a firm, BME is committed to the design and development of in-house applications to serve the business units, and it must therefore innovate to stay at the cutting edge of technology and remain competitive. In 2005 a number of high value added projects were carried out, such as the Unified Case System (UCS), linked loans, MAB, etc.

Some of these projects will continue in 2007, while other new projects will be opened, linked in part to more efficient use of the technological resources available in the Group as a result of the unification of the Data Processing Center and the unifi- cation of the systems area driven by the move to the new operational headquarters.

BME also plans to undertake a medium term evaluation of its technological base during 2007 with the aim of identifying areas for improvement and the investments required in view of underlying future trends in computer applications.

5. Acquisitions of treasury stock

During 2006, 228 own shares were sold, as a result of which as at 31 December 2006, the BME Group held 22 of it own shares in its portfolio, corresponding to the stake acquired by Sociedad Rectora de la Bolsa de Valores de Madrid, S.A., Sociedad Unipersonal when BME was incorporated.

6. Use of financial instruments

BME applies a policy of maximum prudence in the investment of cash funds. The Board of Directors has established specific guidelines in this regard, restricting financial instruments to short term investment in public debt. Accordingly, BME is not exposed to price, liquidity or credit risk in this area of its activity.

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BOLSAS Y MERCADOS ESPAÑOLES,

SOCIEDAD HOLDING DE MERCADOS Y SISTEMAS FINANCIEROS, S.A.