The Brazilian Exchange Changed The Rules Of The Market Panel

Changes to the Rules of the Market Arbitration Panel (Câmara de Arbitragem do Mercado - CAM), also known as Market Panel (Câmara do Mercado), were approved in a restricted hearing, and subsequently approved by the Board of Directors of the Brazilian Exchange (BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros - BVMF) on September 10, 2011. The Market Panel is deemed to be an appropriate forum to settle both corporate and stock market disputes and aims to provide an independent, confidential, agile and cost effective environment for dispute settlements in line with the directives of the Brazilian Arbitration Law (Law No. 9307, of September 23, 1996).

The Market Panel was initially designed for the settlement of disputes arising out of environment where the companies from the special segments of BVMF operate, known as New Market (Mercado Novo) and Corporate Governance Level 2 (Nivel 2 de Governança Corporativa). In Brazil, the company's bylaws may establish that any dispute between shareholders and the company, or between majority and minority shareholders should be resolved by arbitrations under the terms specified by it.

The new Regulation is the result of a long and meticulous process review and updates the procedures to those adopted by the other global arbitration chambers. It allows that anyone willing to settle conflicts whose core is related to corporate issues or the stock market can use the Market Panel, comprising any company (listed or not at BVMF) as well as any kind of investor (institutional investor or not). It was concluded that the Market Panel should have a wider scope to be more ordered and have more experience and prestige.

From now on, the Market Panel will have a larger team of arbitrators, not so focused on people linked to the capital market, but mainly made up of lawyers. Fifteen new names will compose the team of arbitrators, which will total 40 members.

As a result of the changes introduced by the new Regulation, the procedures of the Market Panel have become simpler and more flexible. The major changes are outlined below.

Before the adoption of the new Regulation, the preliminary arbitration demanded that the parties exhausted the dispute about the allegations and that the defenses of both would be presented in a maximum term of five days. This period was considered too short, especially considering the number of documents that normally this type of dispute involves. Now, after the reform, the parties can...