October | 2018

BlackRock is the new signatory to the Amec Stewardship Code

The group of signatories to the Amec Stewardship Code has a new member: BlackRock, the world’s largest fund manager with approximately $ 4.7 trillion USD in assets under management. With the adherence of the asset company, which is also Amec’s member, the group of signatories to the Stewardship Code now has 18 members.

“BlackRock’s focus, as a fiduciary investor, is on engaging companies to encourage them to adopt practices that support the generation of the long-term sustainable financial returns on which our clients depend to meet their financial goals. We are honored to play this role in Brazil,” said Ray Cameron, Head of Investment Stewardship – The Americas of BlackRock. Will Landers, Head of Latin American Fundamental Active Equities, reminded the fund manager’s pioneering initiative among its international peers of joining the group of Amec’s members and reinforcing its commitment to its clients. “Now, more than ever, we need to be attentive to our fiduciary duties. As one of the largest investors in the Brazilian securities market, we are very pleased to show our commitment to our clients by adhering to the Code.”

Stewardship evolves in India

In a letter sent to its clients, IiAS, a leading proxy advisory firm in the Indian market, addressed the latest developments observed during the last season of general shareholders’ meetings. According to the firm, some 35% of the country’s listed companies are held by institutional investors and virtually all of them participated in their invested companies’ meetings. In other words, institutional investors voted in practically 100% of their companies.

This scenario results from important factors. The first one is related to changes to the proxy voting rules, which ensure that all votes are effectively counted. Simultaneously, the IRDA (the Insurance Regulatory and Development Authority), the PFRDA (the Pension Fund Regulatory and Development Authority) and SEBI (the Securities and Exchange Board) created regulatory incentives to improve stewardship practices. Another factor highlighted by the IiAS is the growing participation of institutional investors in Indian companies.

Lastly, it is also a result of the development of a network of service providers that has been carefully examining the boards’ proposals. IiAS, for example, checked voting proposals of 704 shareholders’ meetings of Indian listed companies. Several proposals were rejected or faced strong opposition, mainly in the executive compensation sphere.

Click here to learn more about IiAS
The next meetings of Amec are confirmed, only for members:

» Technical Commission – November 21, at Amec’s headquarters in São Paulo, with remote access.

» Foreigners Commission – November 27, at Amec’s headquarters in São Paulo, via conference call.

» Management Board – November 29, at Amec’s headquarters, in São Paulo, with remote access.

Confirmations of attendance must be submitted to maria.alice@amecbrasil.org.br.

Click here to access the Association’s annual calendar of meetings.

The frog in the pan

If a frog is put into boiling water, it will immediately jump out to survive. If it is placed, however, in cold water that is slowly warming up, it will not be aware of the gradual heat change, and will be cooked to death. It becomes complacent. It gets used to it.

The metaphor is perfect to describe the situation the Brazilian capital market is experiencing. Our market has already represented approximately 25 percent of the MSCI Emerging Markets index – the major global reference for emerging markets. Today, we represent some 7 percent. According to a recent study conducted by Credit Suisse (2014), we will represent from 3 to 4 percent in 2030. In other words, in 40 years we will have lost 90 percent of our relevance in the global markets without having taken any measure to revert the process. The frog is virtually cooked. Read more

Amec requests B3 to reject Gol’s reorganization and the intended structure

Almost three years after restructuring and creating the super-preferred shares – non-voting stock with a significant increase of their economic rights in comparison with common shares, Gol announced a new change that is expected to put the market to the test. As part of the reorganization proposal reported on October 14, Gol announced the merge of its loyalty program Smiles and the company’s future migration to the Novo Mercado segment. Investors are concerned about some aspects of the operation, however. On October 22, Amec sent a letter to B3 requesting the Stock Exchange to interfere in the operation. In the document sent to Gilson Finkelsztain, B3’s CEO, Amec requests B3 to reject the reorganization as it is proposed by Gol. Read more

Amec is admitted to the Working Group on Capital Markets created by the Ministry of Finance

Amec is the new member of the Working Group on Capital Markets, organized by the Ministry of Finance under the supervision of the National Treasury’s secretary, Ana Paula Vescovi. The group is formed by several entities in the capital market and today it works in 10 related agendas. Initially, Amec will participate in the subgroup of institutional investors’ regulations. Read more

ICGN discusses employee representation on boards of directors

The International Corporate Governance Network (ICGN) has been discussing the relevance of worker representation on boards of directors. ICGN supports the idea that companies are responsible not only for their shareholders, but for all stakeholders that are part of their ecosystems. The issue, raised by the director Kerrie Warring, is controversial. Read more

Stock Exchange studies changes to Bovespa Mais to make the access market more attractive

B3 has been consulting market players about changes to the Bovespa Mais, access segment created 13 years ago, to make it more attractive for companies and investors. The discussions are incipient and being followed by Amec, member of B3’s Advisory Committee on Companies and Underwriting matters. Read more

Guidance 38 gives guidance to disclosure of indemnity agreements

At the end of September, the Brazilian Securities and Exchange Commission (CVM) published the Guidance (PO) 38, the first document of the Brazilian regulator exclusively focused on indemnity agreements. The guidance report explains CVM’s opinion on the fiduciary duties of officers regarding agreements that ensure the payment, reimbursement or advance of funds in cases of arbitration, judicial or administrative proceedings involving acts practiced by them in the exercise of their duties. Read more

Forum addresses the importance of diversity at senior team and board level

Forum addresses the importance of diversity at senior team and board level
Amec’s Vice President, Regis Abreu, moderates one of the debates during the Forum on Board Diversity
Diversity, especially gender diversity, was the main topic discussed during the Forum on Board Diversity promoted by CKZ Diversidade, in São Paulo. Amec participated in the panel “The role of investors in making diversity happen.” “The Amec Stewardship Code addresses voting issues from the ownership perspective. Based on that, investors must identify their own priorities. The diversity can be one of them,” says Régis Abreu, Amec’s Vice President. “Diversity is good and we are not talking only about gender diversity,” he adds. Read more

Previ Meeting on Corporate Governance discusses the role of investors

Previ Meeting on Corporate Governance discusses the role of investors
Pedro Rudge, Amec’s board member (in the center), participated in the debate together with Eduardo Figueiredo, Investment Manager at Aberdeen, and Gilmar Wanderley, Manager of Securities Interests at Previ
On October 22, Previ, Brazil’s largest pension fund, held its annual governance event. With the theme “Nothing is permanent but change,” one of the meeting’s focus was the role of investors in the companies’ governance and sustainability practices. Read more

Previ launches new edition of its governance code

In the closing session of its annual event, Previ launched the new edition of Previ Code of Best Corporate Governance Practices. Published for the first time in 2004, the code was revised in 2012 and now it is in its third edition. Its objective is to guide the relationships among all players involved with invested companies and foster those that share the same objectives. Read more
IX Congresso INRE – Processo Sancionador: Bacen e CVM
INRE IX Congress – Sanction Proceedings: Bacen and CVM
Organized by INRE and Iasp
Date: November 27, 2018
Venue: Iasp Unidade Paulista – Av. Paulista, 1294, 19º andar – São Paulo
Click here for the program and to subscribe.
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