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B3 public consultation with proposals for changes to the Novo Mercado rules

October 18, 2024

On October 10, B3 opened a new public consultation to collect contributions to change the rules of the Novo Mercado, a listing segment for companies voluntarily committed to complying with more rigorous corporate governance practices than those required by current legislation.

In May and August of this year, B3 had already carried out an initial consultation, with more than 50 interactions, including individual and collective meetings with more than 120 companies listed on the Novo Mercado, associations and investors, to discuss the details of the proposal presented at the time.

The new proposals for the public consultation include changes to the original proposal, before a restricted hearing is held, a stage in which the companies will actually vote to approve or reject the proposals.

The consultation is open to all those interested in the topics, including market agents, publicly-held companies, investors, regulators, associations and academics, who may send their comments until 11/11/2024 by email sre@b3.com.br.

After analyzing the contributions sent by the public, B3 will announce the restricted hearing, so that the companies listed in the segment can vote on the final proposal, which will also be subject to approval by CVM.

Among the main topics of the review of the Novo Mercado regulations are:

  1. New Market Alert

The list of hypotheses that may trigger the alert will be reduced, considering only the following cases:

  • Disclosure of a relevant fact that demonstrates the possibility of material error in the financial information, as defined by Brazilian accounting standards, including those related to fraud;
  • Delay of more than 30 days in the delivery of financial information, in relation to the deadline provided for in the regulation;
  • Independent auditors' report with modified opinion;
  • Request for judicial or extrajudicial recovery in Brazil or equivalent procedures in foreign jurisdictions.
  • Progress in the rules for the composition of the board of directors

The term for a board member to be considered independent will be extended to 12 years of service on the board. If the board member leaves the company completely, for at least two years, he or she may return to occupy the position of independent board member, starting the 12-year term again.

  • Penalty and increase in fine amounts

B3 decided to remove this item and took into account the prioritization of its educational activities and the fact that the set of measures presented in the consultation represents a significant increase in the corporate governance requirements of the regulation, opting to maintain the fines already defined in the regulation in force.

  • Arbitration Chamber

B3 maintained the flexibility for the use of other arbitration chambers and proposes that the criteria for accreditation of other chambers be approved by B3's board of directors.

Interested parties can access the public consultation via the link:

https://www.b3.com.br/pt_br/regulacao/regulacao-de-emissores/atuacao-normativa/revisao-dos-regulamentos-dos-segmentos-especiais-de-listagem.htm

This communication, which we believe may be of interest to our customers and friends of the company, is intended for general information only. It is not a complete analysis of the matters presented and should not be considered legal advice. In some jurisdictions, this may be considered lawyer advertising. Please see the company's privacy notice for more details.

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