BM&FBovespa changes regulations on segments to include super preferred shares

On July 15, the Brazilian Securities, Commodities and Futures Exchange (BM&FBovespa)  announced changes to the rules that apply to companies listed in Levels 1 and 2. After a period of hearings restricted to the companies in the mentioned levels, the stock exchange approved the flexibilization of the minimum free float concept. Now, companies can have a free float below 25 percent of their total capital, as long as it represents 50 percent of the preferred shares part of the negotiation. In practical terms, the change accommodates the situation of companies that issue preferred shares representing a disproportional portion of the capital – as in the case of the so-called super preferred shares.
The change was approved by 10 companies in Level 1 and 7 companies in Level 2. 17 and 13 companies in each level, respectively, abstained in the vote. The only companies that voted against the change were Gerdau SA, Metalúrgica Gerdau and Ferbasa – all of them pertaining to Level 1. Investors have not been consulted about it.
The change will now be analyzed by the Brazilian Securities and Exchange Commission for approval and is expected to be effective by the end of the year.
Click here to access the result of BM&FBovespa’s restricted hearing.