Amec sends letters to the companies requesting the approval of the Novo Mercado reform

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Amec’s members decided to submit, through the association, individual letters to the board’s members of listed companies, highlighting that it’s very important that they voice their opinions about the B3’s proposals on the evolution of the Novo Mercado and Level 2 listing segments. According to the investors, the changes suggested by the B3 are of utmost importance to maintain the credibility of the premium listing segments.
The Novo Mercado made the revival of the Brazilian equity capital market feasible in the past decade. However, 16 years after its creation, it’s time to update some regulations that have become ineffective over the years.
In the document, the institutional investors mention the recent study prepared by the Professor Pedro Matos, from the University of Virginia, which shows a consistent reduction in the capital cost of the companies listed in the special corporate stock governance level that, in turn, leads to higher stock prices.
In the letters sent to the board’s members, the investors state that “they consider that the B3’s proposal is well balanced and focused on issues that are essential to the evolution of the segment. Contrary to claims that lack a factual basis, the proposal does not generate additional costs to the companies that are really interested in implementing the best practices. Nor does it represent a manichaeistic zero-sum game that gives or takes away shareholders’ rights. A thoughtful analysis of the proposals will show that we are talking about measures that are good for both the companies and shareholders. It’s a win-win game.”
Click here to watch the B3’s presentation about the process and here to access the ballot.