BM&FBOVESPA starts the second stage of the Public Hearing on the evolution process of the Special Segments

The BM&FBOVESPA – the Brazilian Stock Exchange – opened the second stage of the Public Hearing – to take place from November 7^th, 2016 to January 6^th, 2017 – to discuss a new proposal on the rules of the evolution process of the Special Segments (Novo Mercado and Level 2) with listed companies, investors, intermediaries and market’s agents. The new calendar includes the holding of a Restrict Hearing from March 1^st to May 31^st, 2017, and a voting period for listed companies from June 1^st to June 30^th, 2017.
The Stock Exchange decided to add a new stage to the discussion after receiving important contributions during the Public Hearing as part of the several interactions with the market (more than 60 interactions, with approximately 100 companies, market associations and investors) that resulted in changes to the proposals on the rules of the Novo Mercado and Level 2.
The main points discussed with the market’s participants regarding the proposal on changes to the rules applied to the Novo Mercado were: Delisting from the Special Segments, in which the Stock Exchange’s proposal establishes a reduction in the quorum from 50% to 40% and the adoption of the procedure set forth in CVM Ruling 361; OPA 30, in which the Stock Exchange suggests the flexibilization of the “trigger” from 20% to 30% and the holding of tender offers in the form of the Article 257 of the Corporate Law; in addition to the inclusion of new items, such as the Share Dilution rule with waiver of the offers in CVM Ruling 476 (IPOs and follow ons); ban on the participation of the retail market in Pre-Operational offers; and  Corporate Restructurings, in this case, if the resulting companies are not listed in the Special Segments, the transaction must be approved by the free float majority.
The main proposals on changes to the rules of the Novo Mercado discussed with the market’s participants are available in the Stock Exchange’s website:
Click here to access the Workshop presentation about the next stage of the evolution process of the Listing Segments
Click here to access the public notice about the second stage of the Public Hearing
Click here to access the BM&FBOVESPA’s proposal on the evolution of the Novo Mercado
Evolution Process of the Special Segments
In March, BM&FBOVESPA started a broad discussion with listed companies and market’s participants about the evolution process of the Special Segments. The program was divided into three stages: Public Consultation, Public Hearing and Restrict Hearing and includes the Novo Mercado and the Level 2.
Public Consultation
During the first stage of the process, from March 15^th to May 16^th, 2016, market’s participants had the opportunity to answer to 38 questions about several corporate governance-related topics. The Public Consultation received a total of 143 answers. Through the questionnaire, respondents could also make suggestions to BM&FBOVESPA.
In addition to the questionnaire, the Stock Exchange held two thematic workshops (in São Paulo and Rio de Janeiro) and several interactions with investors, companies and associations that allowed it to collect additional opinions from the market’s participants on how to enhance the Special Segments.
Public Hearing
During the Public Hearing, from June 27^th to September 9^th, 2016, BM&FBOVESPA received a total of 39 inputs. In this stage, the Stock Exchange promoted 62 interactions, including individual and group meetings with 100 companies listed in the Novo Mercado and Level 2, associations and investors, with the objective of discussing the detailed proposals about the new rules.
Restrict Hearing
The Restrict Hearing will take place from on March 1^st to May 31^st, 2017. During this stage, the companies listed in the Special Segments (Novo Mercado and Level 2) will analyze the changes to the respective listing regulations. The changes will only be implemented if no more than one third of the companies listed in each Special Segment are contrary to them.

Background
The Novo Mercado was created in 2000 as a differentiated listing segment for the trading of shares issued by companies committed to the adoption of corporate governance practices beyond those established by the applicable laws.
The basic premise guiding the creation of the Novo Mercado was that the adoption of good corporate governance practices would allow a reduction in investor perceptions of risk. Accordingly, the value and liquidity of the shares would be positively affected if the asymmetry of access to information was narrowed and investors were granted additional rights and guarantees. However, the rules have to evolve on a continuous basis for the premise to remain applicable.
The rules of the Special Segments suffered changes in 2006 and 2011 and, five years after their last revision, BM&FBOVESPA starts a new discussion with the broad participation of the market. Today, 129 companies are listed in the Novo Mercado, 18 in Level 2 and 28 in Level 1.