B3 S A Brasil Bolsa Balcão : 133-2020-PRE-Circular Letter

October 20, 2020 133/2020-PRE

C I R C U L A R L E T T E R

To: B3's Market Participants - BM&FBOVESPA Segment

Re: Changes to the Regulations for the Listing of Issuers and for the

Admission of Securities for Trading, the Issuers' Manual and Annexes

B3 hereby informs that on October 20, 2020, the Securities and Exchange Commission of Brazil (CVM) approved new versions of the Regulations for the Listing of Issuers and of the Admission of Securities for Trading (Regulations), and of the Issuers' Manual (Manual) and its Annexes, which will come into effect on October 22, 2020.

The changes aim to update and improve these rules, mainly due to the publication of CVM Resolution 3, dated August 11, 2020, and the consequent need to include, in B3's guidelines, the definition of "recognized market" pursuant to Article 1, paragraph 7, II, Annex 32-I of the mentioned resolution.

Furthermore, changes have been made so that the abovementioned documents may also govern depositary receipts of exchange-traded fund (ETF) shares traded abroad.

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In this regard and aiming to make it easier to identify the implemented changes, we will now refer to the revised wording.

1. Issuers Regulations

1.1. Inclusion of the Securities BDR (Brazilian Depositary Receipts of Securities) definition

Securities BDR (Brazilian Depositary Receipts of Securities) - Certificates, issued by a Depository Institution in Brazil, representing securities issued by a publicly traded company, or similar organizations, headquartered abroad or in Brazil.

1. Inclusion of ETF BDR (Brazilian Depositary Receipts of ETFs) definition
   Brazilian Depositary Receipts (BDRs) of ETF - Certificates, issued by a Depository Institution in Brazil, representing shares issued by an exchange-tradedfund and traded abroad.
2. Inclusion of the "recognized market" definition (item 6.5.1)
   6.5.1. As regards the specific request to admit Securities BDRs and ETF BDRs for trading, the term "recognized market", for the purposes of CVM's regulations, comprises the following stock exchanges: New York Stock Exchange (NYSE) and Nasdaq Stock Market.

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2. Issuers' Manual

There was also the inclusion of the definitions for Securities BDR (Brazilian Depositary Receipts of Securities) and ETF BDR (Brazilian Depositary Receipts of ETFs).

In items 3.1.1.1 (ii) and 3.1.3.2 (ii), the term "shares" has been replaced for "securities" where referring to the BDRs' underlying securities. In items 3.1.2.1 and 6.1.1.14, references have been updated in relation to CVM's regulations that govern certain investment funds. Moreover, B3's email addresses have also been changed in several provisions.

Due to the inclusion of ETF BDRs, item 6.6 was divided in two parts.

Thus, item 6.6.A was added to comprise the already existing items 6.6.1 to 6.6.8 (and respective subitems), which refer to Securities BDRs and were only adjusted to reflect the new definition. Item 6.6.B was created to regulate ETF BDRs, with the inclusion of items 6.6.9 to 6.6.11, in the following terms.

1. The request for admission of ETF BDRs for trading in B3 shall be supported with the form, the information and documents indicated in Annex 6.6.9.
2. In relation to ETFs traded abroad, B3 shall accept ETF BDRs issued by a depository institution authorized by the CVM, in the scope of a ETF BDR Program as defined by CVM Instruction 359/2002, duly registered with CVM, with the underlying being such ETFs, as long as:

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1. the shares used as underlying have an average daily trading volume equivalent to at least USD5,000,000.00, considering all the markets in which the security in question is traded;
2. the fund drafts and publishes financial statements in accordance with International Financing Reporting Standards or US GAAP;
3. the underlying shares are accepted for trading in organized securities markets and are held in custody in countries (a) whose regulatory bodies have signed an agreement with CVM about consultation, technical assistance and mutual assistance for the exchange of information, or (b) are signatories to an International Organization of Securities Commissions (IOSCO) multilateral memorandum of understanding.

6.6.10.1. The above criteria are checked only upon the acceptance for trading of ETF BDRs issued by a depository institution authorized by CVM.

6.6.11. The voluntary discontinuity of an ETF BDR Program shall observe the following requirements, in accordance with the applicable regulation:

1. the decision to discontinue the ETF BDR Program shall be made by the Depository Institution;
2. immediate market disclosure of the decision to discontinue the ETF BDR Program, subject to B3's approval in relation to its proceedings and conditions;
3. submission to B3's approval, within five (5) days from the disclosure provided for under item (ii), of the proceedings and conditions for the discontinuity of the ETF BDR Program, which shall comprise, at least, as following alternatives and deadlines:

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