On entry into force of a new provision on disclosure by issuers on the securities market

23.03.2015

Legal Update 513

The update relies on legal acts effective as of 12 March 2015

Goltsblat BLP advises that, on 30 December 2014, the Bank of Russia approved Provision No. 454-P on disclosure by securities issuers (hereinafter the "Provision"), which came into force on 17 March 2015.

This Provision covers all securities issuers, including foreign ones, plus international financial institutions whose securities are placed and/or circulate in Russia (apart from the Central Bank of Russia and issuers of government and municipal securities).

The Provision determines the following requirements on disclosure of:

  • information on the issue (additional issue) of securities;
  • information in the format of a securities prospectus;
  • consolidated financial statements by the securities issuer;
  • quarterly report by the securities issuer;
  • material facts related to the securities issuer and
  • other information about discharge of liabilities by an issuer and exercise of rights for securities being placed or outstanding.

This Provision contains certain material amendments to the disclosure procedure.

For example, additional requirements are set on disclosure in the form of an annual report. Pursuant to the Provision, joint-stock companies are to disclose much more information on remuneration of the members of the Board of Directors compared to FSFM Order No. 11-46/pz-n dated 04 October 2011. In addition, according to the new rules, the annual report may only be signed by the person acting as the sole executive body. The Chief Accountant of a joint-stock company no longer needs to sign the annual report as stipulated by the previous provision on disclosure. Moreover, with respect to joint-stock companies whose shares are accepted for trading, significant requirements are envisaged on disclosure of information in the annual report about the company's compliance with the principles and recommendations in the Corporate Governance Code.

Pursuant to the Provision, issuers are obliged to disclose material facts about the general meeting of issuer's bond holders and the agenda thereof, as well as about the decisions passed thereby and a new representative of bond holders determined by the bond issuer.

Additionally, issuers are no longer required to disclose on the Internet regarding changes in the list of joint-stock company affiliates.

Joint-stock companies must also disclose information on the scheduled date for applying for records related to reorganisation, winding-up or liquidation of a joint-stock company to be introduced into the Unified State Register of Legal Entities.

Once the Provision comes into effect, Order No. 11-46/pz-n by Russia's FSFM dated 04 October 2011 previously regulating the disclosure on the securities market will become invalid.

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