B3 – Novo Mercado and State Owned Entreprises Governance Program

Novo Mercado


Released in 2000, Novo Mercado established since its creation a new and highly differentiated standard in corporate governance. Since the first listing in the Segment, in 2002, Novo Mercado has become the standard in transparency and corporate governance required by investors to new IPOs. It has also become recommended to companies that intend to carry out offers targeted to any kind of investor (institutional investors, private individuals, foreigners, etc).

In the last decade, Novo Mercado has become a listing segment for trading of shares issued by companies that voluntarily adopt additional corporate governance practices beyond those required by Brazilian legislation. Listing in this special segment entails the adoption of a set of corporate rules that increases shareholders’ rights, as well as enhances the disclosure of policies and the existence of monitoring and control structures.

Novo Mercado leads companies to the higher corporate governance standards

Source: B3’s website

Regulation

The Regulation stablishes the requirements applicable to the trading of securities issued by publicly traded on the special listing segment of the stock market opererated by B3, known as Novo Mercado, which set forth enhanced corporate governance standards for the listing of such Companies, as well as rules applicable to their Senior Managers and shareholders, including the Controlling Shareholders

Source: B3’s website

Requirements

Since its creation, Novo Mercado has been revised in 2006, 2011 and 2017. The current Novo Mercado Listing Regulation was approved by the listed companies in a closed hearing in June, 2017 and was approved by the CVM’s Board of Commissioners on September, 2017. The new listing regulation came into force on January 2nd, 2018.

Here are some of the Novo Mercado’s rules related to corporate governance structures and shareholders’ rights:

• Share Capital must consist only of common voting shares;

• Same conditions provided to majority shareholders in the transfer of the Company’s Control will have to be extended to all shareholders (100% Tag Along);

• Setting up of Internal Auditing and Compliance department as well as an Audit Committee (Statutory or Non-statutory);

• In case of delisting from Novo Mercado, holding of a Public Tender Offer (PTO) for a fair price, with minimum acceptance quorum of 1/3 of the free float shareholders;

• Board of Directors must be composed by, at least, 2 or 20% independent directors (whichever is greater), with unified term of office of at most 2 years;

• Listed companies commit to maintain a free float of, at least, 25% or 15%, in case of ADTV (average daily trading volume) above R$ 25 million;

• Structuring and disclosure of a process of assessment of the board of directors, its committees and the executive officers;

• Elaboration and disclosure of the following policies: (i) Compensation Policy; (ii) Nomination Policy of the Board of Directors, Advisory Committees and Executive Management Board; (iii) Risk Management Policy; (iv) Related Party Transaction Policy; and (v) Securities Trading Policy, with minimum requirements (except for the Compensation Policy);

• Simultaneous disclosure, in Portuguese and English, of Material Information, benefit distribution information and earnings press releases;

• Mensal disclosure of the negotiations, by the controlling shareholders, with securities issued by the company.

Source: B3’s website

State Owned Entreprises Governance Program


The State-Owned Enterprises Governance Program, aimed at public State-Owned Companies (SOE) or SOEs with ongoing of IPO, was developed with the objective of encouraging such companies to improve their practices and corporate governance structures.

The initiative is intended to contribute to restore trust between investors and SOEs, presenting objective and concrete measures in order to reduce uncertainties concerning the conduct of business and the disclosure of information, notably regarding the achievement of the public interest and its limits, as well as the political component inherent to these companies.

The State-Owned Enterprises Governance Program is voluntary and, to obtain the certification, the SOEs must comply with the corporate governance measures set forth in the Program.

On June 30, 2016, nine months after the release of the Program, the law 13.303/16 – that established the State-owned Companies’ legal regime – was enacted. Considering this new law, was necessary to align the Program’s text with it.

In the reviewing effort to align the Program with the new law, B3 used the opportunity to amend the Program, aiming to detail some measures and to address questions raised in discussions with the SOEs and with market players.

The new statute of the State-Owned Enterprises Governance Program was published on May 11, 2017, entering force on the same day.

According to the current Statute, in order to receive the certification, the SOEs, at the moment of the application, must implement all the corporate governance measures set forth in the Program, or, alternatively, comply with all the 6 (six) mandatory measures and obtain, at least, 48 (forty-eight) points among the other measures. The SOEs shall have 3 (three) years to fully comply with the measures, under penalty of losing the certification.

Source: B3’s website

*Portuguese Only


Atualizado em 03/21/2019 às 04:24 pm


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