Gilberto MifanoGilberto MifanoCEOCEO

June/ 2006June/ 2006

The 2006 meeting of the

LATIN AMERICAN CORPORATE GOVERNANCE ROUNDTABLE

BOVESPA´s Initiatives to Better BOVESPA´s Initiatives to Better Promote Corporate GovernancePromote Corporate Governance

2

Novo MercadoNovo Mercado

Special listing segment with additional Corporate Governance requirements, beyond those established in current Brazilian regulation Transparency: more information is required

Broadening the rights of minority shareholders

Voluntary decision based on a contract between the company, its controlling shareholders, board of directors, senior executives and BOVESPA Agreement to comply with Novo Mercado Listing

Rules Agreement to settle any shareholder disputes by

arbitration - Câmara de Arbitragem do Mercado

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EvaluationEvaluation

Goal To create a favorable environment for public

offerings, mainly IPOs, revitalizing the Brazilian

Capital Market

Results Revival of IPOs

Increasing investors’ confidence and interest,

especially foreign investors’

Higher multiples stimulating more IPOs

Less resistance to secondary offerings

Good acceptance of smaller companies offerings

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Revival of IPOsRevival of IPOs

20

10

1 10

10

79

12

0 0 0 0

15

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

IN PROCESS

ACTUAL

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COMPANY SEGMENT PRIMARY OF-

R$ MMSECOND ARY OF-

R$ MMTOTAL R$

MM NET REVENUE

R$ MMNatura NM 0 768 768 1.329Gol N2 498 380 878 1.401ALL N2 267 321 588 760CPFL Energia NM 685 136 820 6.057Grendene NM 0 617 617 1.061DASA NM 126 311 437 364Porto Seguro NM 129 248 377 0TOTAL 2004 1.705 2.781 4.485Renar Maçãs NM 16 0 16 47Submarino NM 135 338 473 276Localiza NM 0 265 265 616TAM N2 384 165 548 4.520EDP NM 1.170 15 1.185 3.703OHL NM 135 361 496 268Nossa Caixa NM 0 954 954 -Cosan NM 886 0 886 5.068UOL N2 323 302 625 408TOTAL 2005 3.049 2.398 5.447Copasa NM 813 0 813 1.453Vivax N2 59 470 529 263Gafisa NM 494 433 927 494Company NM 208 73 281 143TOTVS NM 345 115 460 219Equatorial N2 256 284 540 665Abnote* NM 0 480 480 389CSU * NM 100 241 341 314BrasilAgro NM 583 0 583 -Lupatech* NM 155 274 429 173Datasul* NM 151 166 317 152GP Investim.* BDR 645 0 645 -TOTAL 2006 3.809 2.536 6.345TOTAL GERAL 8.563 7.715 16.278

2005

2004

2006

IPOs since 2004IPOs since 2004

•Preliminary data

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Novo Mercado´s ConsolidationNovo Mercado´s Consolidation5 years after launching5 years after launching

1824

31 3337 35

3

37

10 13

2

2

7

18

30

2001 2002 2003 2004 2005 6/13/2006

NM

L2

L1

18

29

36

47

65

78

20% of total listed companies49% of total market capitalization55% of total daily trading value

Number of companies

7

What is next?What is next?Maintain the image value and theMaintain the image value and the strengthening strengthening of of NMNM

Environment – ongoing changes: Regulation evolution

Domestic and International markets evolution

Companies evolution

Investors’ growing demand for better

Corporate Governance

Update and modernization of Novo

Mercado rules in order to maintain its

attractiveness and effectiveness

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Special Segments Rules´ RevisionSpecial Segments Rules´ Revision

Effective since February/2006

Approved by companies listed in Levels 1,

2 and Novo Mercado after hearing among

all companies listed on each level (NM,

Level 2 and 1) The new companies which were up to adhere to

Novo Mercado and the Special Levels

considered the changes very positive

Understanding and wish to distinguish the

adhesion decision

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RevisionRevision due to due to EEvolution of the volution of the Brazilian RegulationBrazilian Regulation

Standardization of some definitions with

the CVM’s Terms of the public offers in case of delisting,

NM or N2 delisting or disposal of control

Increasing the tag along value for

preferred shares (Level 2) from 70% to

80%

Arbitration: improvements in the writing

style and higher disclosure about the

arbitration adhesion

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Revision due to the Revision due to the EEvolution of the volution of the CCapital apital MMarketarket

Inclusion of “Dispersed ownership”

definition Recognizing the new reality emerging in Brazil

Increasing importance of Independent

Board Members At least 20% of the Board must be composed of

independents members (not linked to the

company or to the controlling shareholders)

Unified term of office from 1 to 2 years

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What is next?What is next?Listed companies migrationListed companies migration

In 2005/2006: adhesion of 11 listed

companies

The structural barriers for listed

companies are bigger than those

for the companies that are going

public

Main leverages: Investors

Initiatives like Companies Circle

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What is nextWhat is next??IncreaseIncrease the the number of companies going number of companies going publicpublic

BOVESPA MAIS

New corporate governance listing segment

Natural path to Novo Mercado

For companies that want to access the market gradually, with more concentrated or smaller offerings, particularly small and medium enterprises

Basically aimed at medium term investors

Segment counts on BOVESPA’s programs to support companies in terms of their market exposure and in building the internal culture of public company

Launching yet to be defined – prospecting phase and preparation of companies to be listed on this segment

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Thank you!Thank you!

Gilberto MifanoGilberto Mifano

BOVESPA - Bolsa de Valores de São PauloBOVESPA - Bolsa de Valores de São Paulo

www.bovespa.com.brwww.bovespa.com.br

bovespa@bovespa.com.brbovespa@bovespa.com.br