Bovespa to launch New Market (Novo Mercado) for foreign companies
Valor Econômico - 07/28/2008
Foreign companies willing to have their securities listed in Brazil will soon have access to a special governance segment dedicated only to them. "We will launch the New Market for BDRs (Brazilian Depositary Receipts)", announced BM&F Bovespa's CEO, Edemir Pinto, referring to the papers of international companies willing to come to the São Paulo Stock Exchange. Gilberto Mifano, Chairman of the Board of Directors of the Stock Exchange, explained that the foreign companies which have already moved or intend to move to Brazil are interested in a brand name to which they do not have access - the New Market. Since they are outside the Brazilian jurisdiction, these companies cannot adhere to the local governance standards, based on the Brazilian Corporate Law - a legislation they are not subject to up to the moment. Now, BM&F Bovespa is preparing the legal structure to do so. The idea is to allow these companies to offers better treatment to minority stockholders and more transparency, in compliance with the standards of the commitments of the companies of the traditional New Market. The expectation is to have the rules ready in six months. "Until the end of the year, we should have some heating in this market", stated Pinto. The project of expansion of BM&F Bovespa is supported by the expectation of bringing Latin American companies, concentrating the regions' liquidity in the local market. The creation of the new segment also serves this purpose. "In order to draw companies here, it is necessary to create more incentives, such as leveling corporate governance with the New Market".