BM&FBOVESPA Has Opened The Second Phase Of Public Hearings For The Special Corporate Governance Segment’s Development Process - Exchange Is Receiving Comments Until January 06, 2017. Closed Hearings Begins March 15, 2017

BM&FBOVESPA has opened until January 06, 2017, the second phase of public hearings to discuss with listed companies, investors, intermediaries, and market bodies a new proposal for regulations for the Special Corporate Governance Segments (Novo Mercado and Level 2 corporate governance). The new schedule also foresees Closed Hearings from March 15, 2017 until May 31, 2017, and a voting period for listed companies from June 01, 2017 until June 30, 2017.

BM&FBOVESPA decided to expand this phase of discussions after receiving important contributions during public hearings and various interactions with the market (there have been more than 60 interactions with about 100 companies, market entities and investors) which resulted in changes to the proposals for Novo Mercado and Level 2 corporate governance regulations.

The main points discussed with market participants regarding the proposed regulation changes for the Novo Mercado Listing Rules are: Delisting, whereby BM&FBOVESPA proposes a reduction of the quorum from 50% to 40%, thus adopting the procedure described in CVM Instruction 361; OPA 30, in which BM&FBOVESPA suggests greater flexibility of the "trigger" from 20% to 30% and the execution of a PTO with a procedure foreseen in Instruction 257 of the Lei das S.A. law; as well as the inclusion of new items such as stock dispersion with an exemption of the requirement in ICVM 476 offerings (IPOs and follow-ons); exemption of retail from Pre-operating and corporate restructuring, if the resulting parties are not within the segment, the operation must be approved by a majority of the free float.

Listed on the BM&FBOVESPA website are the main proposals to change Novo Mercado Listing Rules, discussed with market participants:

See the presentation of the Workshop on the Development Process of the Novo Mercado and Level 2

See the notice for the second phase of Public Hearings

See the BM&FBOVESPA proposal for Novo Mercado development

The Development Process for Special Segments

In March, BM&FBOVESPA began broad discussions with listed companies and market participants into the development process for the Special Corporate Governance Segments. The program has been divided into three stages: Public Consultation, Public Hearings and Closed Hearings and includes the Novo Mercado and Level 2 corporate governance.

Public Consultation

In the first stage, which took place from March 15, 2016 to May 16, 2016, market participants were able to answer 38 questions on various topics related to corporate governance. In total, 143 answers were received in the Public Consultation. The questionnaire also allowed respondents to make other suggestions to BM&FBOVESPA.

In addition to the questionnaire, there were two workshops (São Paulo and Rio de Janeiro) and various interactions with investors, companies and other bodies, which allowed BM&FBOVESPA to gather more impressions from market participants on improving the Special Corporate Governance Segments.

Public Hearing

During the Public Hearing, which took place from June 27, 2016 to September 09, 2016, BM&FBOVESPA received a total of 39 comments. In this step, it performed 62 interactions, including individual or group meetings with 100 listed companies for Novo Mercado and Level 2 corporate governance, and with associations and investors, to discuss the details of the proposed new Regulations.

Closed Hearings
The Closed Hearings will start on March 15, 2017 and will finish on May 31, 2017. During this third phase, the companies listed in the Special Corporate Governance Segment (Novo Mercado and Level 2 corporate governance) will decide on the respective changes to listing regulations. Changes can only be implemented if not contested by more than 1/3 of listed companies in each of the Special Corporate Governance Segments.

Public Consultation

From March 15, 2016 until May 16, 2016

Questionnaire on the BM&FBOVESPA website about corporate governance practices.
Open to all interested parties.
To help new discussions and the Exchange’s proposal for the next step.

Public Hearings

From June 27, 2016 until September 09, 2016

A proposal to modify the Special Corporate Governance Segments, built from data collected during the first phase of the discussion.

Second Phase of Public Hearings

From November 07, 2016 until January 06, 2017

A proposal to modify the Special Corporate Governances Segments, built from data collected during the first phase of the discussion.

• Allows the participation of all stakeholders.

• Will contribute to the final proposal to amend Regulations.

Closed Hearings

From March 15, 2017 until May 31, 2017

Final proposals based on data collected during the Public Consultation and Public Hearings.
Only companies listed in the Special Corporate Governance Segments make statements about the modifications to the respective listing rules.

Voting Period

From June 01, 2017 until June 30, 2017

History

The Novo Mercado was established in 2000 as a differentiated listing segment for trading shares issued by companies committed to the adoption of corporate governance practices beyond those required by law.

The premise for the creation of the special listing segments was that adopting good corporate governance practices permits reduced investor risk perception. The resultant greater information symmetry and the additional rights and guarantees could thus positively influence the valuation and liquidity of shares. To maintain the applicability of this premise, however, the rules must constantly evolve.

The rules for the special corporate governance segments were reviewed in 2006 and 2011, and now, five years after their last revision, BM&FBOVESPA is launching new discussions with broad market participation. Currently there are 129 companies in the Novo Mercado, 18 at Level 2 and 28 at Level 1.