The Regulation set out the requirements that must be followed for the trading in securities, issued by publicly-held companies, on a special stock market segment of the São Paulo Stock Exchange, know as Novo Mercado, also laying down differentiated listing rules to be followed by these companies, their Senior Managers and Controlling Shareholder.
The main innovation of Novo Mercado concerns the capital stock, which must be solely represented by common shares (voting shares). In brief, publicly-held companies listed on Novo Mercado have the following additional obligations:
• Public share offerings have to use mechanisms to favor capital dispersion and broader retail access.
• Maintenance of a minimum free float, equivalent to 25% of the capital.
• Same conditions provided to majority shareholders in the disposal of the Company’s Control will have to be extended to all shareholders (Tag Along).
• Establishment of a two-year unified mandate for the entire Board of Directors, which must have five members at least, of which at least 20% (twenty percent) shall be Independent Members.
• Disclosure of annual balance sheet, according to standards of the US GAAP or IFRS.
• Improvements in quarterly reports, such as the requirement of consolidated financial statements and special audit revision.
• Obligation to hold a tender offer by the economic value criteria, in case of delisting or cancellation of registration as publicly-held company.
• Compliance with disclosure rules in trades involving securities issued by the company in the name of controlling shareholders.
• Some of these obligations must be approved at the General Shareholders Meetings and included in the corporate bylaws.
Source: BM&FBOVESPA website