In December 2000, B3 S.A. – Brasil, Bolsa Balcão (“B3”) (anteriorly known BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros), introduced three new segments of negotiation, with different levels of Corporate Governance practices, denominated Level I, Level II and “Novo Mercado”, with the objective of stimulating open companies to follow the best Corporate Governance practices and to adopt an additional level of information disclosure than what is legally required. Different listing segments are intended for trading of stock issued by open companies that commit, voluntarily, to observing corporate governance practices and information disclosure demands above those that are already imposed by Brazilian law. Generally, these rules expand shareholders´ rights and increase the quality of information offered to them.
“Novo Mercado” is the strictest of them, demanding most of Corporate Governance among the three segments. The companies entering into the Novo Mercado are subject, on a voluntary basis, to certain stricter rules, undertaking, for instance:
- To issue only common shares;
- To maintain, at least, 25% of the outstanding shares pertaining to the Company’s capital, or 15%, in case of ADTV (average daily trading volume) above R$25 million;
- the board of directors should be composed of at least at least 2 or 20% of independent members, whichever is greatest, for a term of up to two years;
- Disclose relevant facts, information about proceeds and press releases for the company´s results in English simultaneously to the same disclosure in Portuguese;
- To carry out a public presentation about the company´s results of quarterly information and its annual financial reports;
- To make available the annual financial statements in Portuguese and English based on the internationally accepted accounting principles;
- Disclose monthly trading of securities´ issued by the Company´s controlling shareholders or other persons related thereto;
- Disclose annual calendar regarding each civil year, containing at the most, the dates of: (i) disclosure of complete annual financial statements and of standard financial statements (DFP); (ii) disclosure of quarterly information (ITR) ; (iii) realization of the Ordinary General Assembly (AGO); and (iv) disclosure of the reference form.
The accession to Novo Mercado is given by contract signature between the company, it´s managers and controlling shareholders and B3, besides adjusting the company´s Bylaws to the rules contained in the Novo Mercado regulations.
By signing the contracts, the companies should embrace the Novo Mercado´s regulations and procedures. The rules imposed by Novo Mercado seek to concede more transparency regarding the activities and economic situation of the companies to the market, as well as more powers to the minority participation shareholders in the company´s management, besides other rights.
Our common shares are traded at Novo Mercado of B3 under ticker CAML3.
Holders of our common shares are entitled the following rights:
- Right to vote at the Company’s General Meetings, each share representing one vote;
- The right to the mandatory minimum dividend, in each fiscal year, equivalent to 25.0% of adjusted net income pursuant to article 202 of the Brazilian Corporate Law;
- Right to sell the Shares under the same conditions as the selling controlling shareholder, in the event of direct or indirect disposal of the Company’s control, either through a single transaction or through successive transactions (100% tag along);
- The right to receive full dividends and other benefits of any nature that may be issued by the Company as of the Settlement Date;
- In case Camil leaves Novo Mercado, the right of disposal of Shares in OPA for a fair value, being a minimum of 1/3 of the shareholders necessary to accept the OPA or to agree with leaving the segment; and
- All other rights granted to each share, under the terms set forth in the Novo Mercado Listing Rules, Camil’s Bylaws and the Brazilian Corporate Law.
The Brazilian securities market is regulated by the CVM, which has regulatory authority over the stock exchanges and securities markets, as well as by the CMN and the Central Bank, which have, among other powers, licensing authority over brokerage firms and regulatory authority over foreign investment and foreign exchange transactions. The Brazilian securities market is generally regulated by Law No. 6,385, of December 7, 1976, or the Securities Market Law, Brazilian Corporate Law and by the rules and regulations issued by the CVM, the CMN and the Central Bank. These laws and other rules and regulations together set the requirements for disclosure of information applying to issuers of securities listed on stock exchanges, the criminal penalties for insider trading and price manipulation, the protection of minority shareholders, licensing procedures, supervision of brokerage firms, and governance of the Brazilian stock exchanges.
Under Brazilian Corporate Law, a company is either publicly-held and listed (sociedade por ações de capital aberto), like us, or privately held and unlisted (sociedade por ações de capital fechado). All listed companies are registered with the CVM and are subject to periodic disclosure of information and disclosure of material fact requirements.
The Brazilian over-the-counter market, organized or not, consists of negotiations between investors which are overseen by self-regulatory entities; authorized by the CVM. No special application, other than registration with the CVM, is necessary for securities of a publicly-held company to be traded on the over-the-counter market. CVM demands that the respective overseeing entities deliver information regarding all the negotiations made in the Brazilian over-the-counter market.
The trading of securities of a listed company on B3 may be suspended upon request of the issuer before the announcement of a material event (fato relevante). Trading may also be suspended on the initiative of the B3 or the CVM, among other reasons, based on or due to a belief that a company has provided inadequate information regarding a material event or has provided inadequate responses to inquiries by the CVM or B3.
Trading on Brazilian stock exchanges by non-residents of Brazil is subject to certain restrictions under the Brazilian foreign investment legislation.
Investors residing outside of Brazil are authorized to purchase equity instruments, including our common shares, on the Brazilian stock exchange, provided that they comply with the registration requirements set forth in Law No. 4,131 or CMN Resolution No. 2,689 and CVM Instruction No. 325. Foreign investors that invest in the Brazilian financial and capital markets under Resolution No. 2,689 are subject to a favorable tax treatment, as long as they are not residents of a country that does not impose income tax or where the maximum income tax rate is lower than 20%, or a Low or Nil Tax Jurisdiction, in accordance with Brazilian tax laws.
With certain limited exceptions, under Resolution No. 2,689 investors are permitted to carry out any type of transaction in the Brazilian financial capital markets involving a security traded on a stock, future or organized over-the-counter market. Investments and remittances outside Brazil of gains, dividends, profits or other payments under our common shares are made through the exchange market.
In order to become a Resolution No. 2,689 investor, an investor residing outside Brazil must:
- appoint a representative in Brazil with powers to take actions relating to the investment;
In addition, Resolution No. 2,689 investors must register with the Brazilian Federal Revenue pursuant to RFB Instruction No. 748, of June 28, 2007.
Securities and other financial assets held by foreign investors pursuant to Resolution No. 2,689 must be registered or maintained in deposit accounts or under the custody of an entity duly licensed by the Central Bank or the CVM. In addition, securities trading by foreign investors is generally restricted to transactions involving securities listed on the Brazilian stock exchanges or traded in organized over-the-counter markets licensed by the CVM.
Pursuant to the Securities Market Law, we are required to inform the CVM and B3 of any material developments relating to our Company and our business. CVM Instruction 358 governs the disclosure and use of information related to material acts or facts relating to publicly- held companies. Such requirements include provisions that:
- establish the concept of material development, which includes decisions made by controlling shareholders, resolutions of shareholders’ meetings or the senior management of publicly- held companies, or any other act or fact of a policy, administrative, technical, business or financial and economic nature relating to the business of a company, which may substantially affect (a) the trading price of securities issued by the relevant company; (b) a decision by investors to buy, sell or hold the securities; and (c) a decision by investors to exercise any inherent rights underlying the type of securities owned; and, in addition, provisions that.
- specify examples of potentially material developments, including, the execution of shareholders’ agreements regarding a transfer of control of the company’s shares, admission or withdrawal of a shareholder bound under an agreement entered into with the company or who is a consultant for affairs of a managerial, financial, technological or administrative nature, and matters related to transactions involving a merger, consolidation or spin- off of the company or any related companies;
- require the investor relations’ officer, the controlling shareholders, the directors, executive officers, fiscal council members and members of any technical or advisory committees created under the bylaws to disclose material developments to the CVM;
- require disclosures of material developments to be made simultaneously to all markets in which securities issued by the relevant company are listed for trading;
- require the acquirer of control to disclose material developments, including any intent to delist the shares or go private within the year following the acquisition of control;
- establish rules for the disclosure of any purchase or sale of a relevant interest in a publicly- held company; and
- restrict the use of insider information.
Under CVM Instruction No. 358, under exceptional circumstances we may submit to the CVM a request for confidential treatment of certain material developments if our controlling shareholders or directors or executive officers consider that a particular disclosure would jeopardize our interests.
- appoint an authorized custodian in Brazil for the investments, which must be a financial institution duly authorized by the Central Bank and CVM; and
- through its representative, register itself as a foreign investor with the CVM and register the investment with the Central Bank.
Updated at 08/31/2018 at 03:05 pm