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Regional Seminar on NBFI in Latin America

Regional Seminar on NBFI in Latin America.  Challenges for Domestic Equity Markets  December 4-6 Santiago,Chile. Challenges for Domestic Equity Markets. Contents Overview of Brazilian Equity Markets The Four Objectives Recent Reforms CVM Recomendations on Corporate Governance

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Regional Seminar on NBFI in Latin America

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  1. Regional Seminar on NBFI in Latin America  Challenges for Domestic Equity Markets  December 4-6 Santiago,Chile

  2. Challenges for Domestic Equity Markets Contents • Overview of Brazilian Equity Markets • The Four Objectives • Recent Reforms • CVM Recomendations on Corporate Governance • Key Points for Further Debate

  3. Challenges for Domestic Equity Markets Overview of the Brazilian Equity Markets • Market Capitalization and Liquidity • ADR Listings • Primary and Secondary Offerings

  4. Challenges for Domestic Equity Markets Key Differences from Developed Markets • Defined control • Majority non-voting shares • History of poor enforcement/low protection • Lack of equity culture/incipient activism

  5. Challenges for Domestic Equity Markets Simplified Rationale Flow • Old Paradigm: Top Down----Macro Variables—Price—Buy • New Paradigm: Good Co.– Good Governance—Good Rules– Confidence(Macro &Price)—Buy(Active Investor)

  6. Challenges for Domestic Equity Markets The Four Objectives • Corporate Law Reform • Corporate Governance • Sheraholder Activism • Enforcement

  7. Challenges for Domestic Equity Markets CVM recommendations on Governance • Transparancy of Ownership and Control, shareholder meetings: e.g.30 days --- list of shareholders—description and details to be discussed---- voting process • Structure and Responsabilities of The Board of Directors: e.g. Composition, term , committees and by-laws, minority shareholders • Minority Shareholder Protection: e.g. Tag-Along, Transactions Among Related Parties, Arbitration to Solve Divergences

  8. Challenges for Domestic Equity Markets CVM recommendations , continuation: • Accounting and Auditing :e.g. MD&A and factors/risks performance, Fiscal Board Access to Information,Auditing/ Other services • For complete guide please refer to WWW.CVM.COM.BR

  9. Challenges forDomestic Equity Markets Key Points For Further Discussion: • Sarbanes-Oxley Act of 2002 • NYSE Corporate Accountability and Listing Standards for non-US issuers • Auditing Standards – IAS or USGAAP • Bovespa Novo Mercado • The Role of Development Banks • Shareholder Activism—Brazil’s Experience

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