On July 15, 2023, the Brazilian Securities Commission (“CVM”) approved a proposal by the Brasil, Bolsa, Balcão (B3) Exchange (“B3”) for the purpose of: (i) updating the regulation on B3 issuers (“New Regulation”); and (ii) creating Annex B to the New Regulation (“ASG Annex”), which took effect on August 19, 2023, with the objective of increasing the diversity based on gender and inclusion of other underrepresented groups in senior management positions of companies listed on the B3.

Among the measures proposed by the B3 and approved by the CVM with the issuance of the New Regulation, we can highlight the following:

(i) Requirement for at least one woman and one person belonging to groups considered “underrepresented” (blacks, browns, indigenous, LGBTQIA+ and disabled people) to be elected to positions on the board of directors and executive board of listed companies, within two years from the date the ASG Annex takes effect (August 19, 2025); and

(ii) Inclusion in policies on variable compensation, as the case may be, of performance indicators related to practices that promote diversity of gender, sexual orientation, color/race, age range, etc.).

The ASG Annex was prepared based on the “practice or explain” model, according to which companies must disclose in their Reference Forms the actions and initiatives adopted to comply with the ASG measures, or justify the reason for not doing so. 

More information, including the full text of the New Regulation and ASG Annex, can be found at the B3’s website (www.b3.com.br).