Russia: Russian Corporate Action reform
1 July 2016
Clearstream Banking1 will implement the Corporate Action (“CA”) reform to the events process on the Russian securities market.
Impact on Customers
The reform is carried out with the Federal Law N° 210-FZ “On Making Amendments to Certain Laws of the Russian Federation and Repeal of Some Provisions of Certain Laws of the Russian federation” dated 29 June 2015, which makes amendments, inter alia, to the following laws: the Federal Law 208-FZ ‘On Joint-Stock Companies’ and the Federal Law 39-FZ “On Securities market”.
The changes aim to ease the participation of foreign holders in CA events by introducing the following changes:
- The Disclosure for voluntary CA will become voluntary and should be provided only if securities owner would like to participate in the voluntary event. The peculiarity is that the disclosure must be provided within the deadline for the meeting approving the CA but not within the event's deadline itself.
- A Power of Attorney is no longer requested for the CA events that fall under the reform.2
- The reform will also facilitate the notification of nominee holders and delivery of voting ballots in electronic format through the chain of nominee holders.
- Russian issuers are obligated to notify the National Security Depository (NSD) of any upcoming CA events, as the NSD is set to become the official source of CA information.
Additionally, the reform tackles the standardisation of SWIFT messaging to achieve better straight-through processing, new provisions for tender offers, mandatory squeeze-out offers as well as for meeting participations and agendas. These elements will be part of the CA notification received by Clearstream’s customers.
Clearstream Banking has reviewed the reform with its service provider as well as internally in order to adjust the changes to the CA events processing.
Subsequently should any CA events be launched before 1 July 2016, the processing will follow the "old way" until full completion of the events.
Any CA events launched on or after 1 July 2016, will follow the “new way” including the new CA reform features.3
For further information, please contact Clearstream Banking Client Services or your Relationship Officer.
1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500, and Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248.
2. A Power of Attorney will be still required for events where the issuer is not obliged by law to process the CA in a “new way”, first of all it refers to issuers that are not CSD-eligible. Priority offers (complex cases where issuer is a banking institution or a strategic company), market offers, other events where issuers/agents may still require documents for participation, as well as general meeting conducted in the form of personal attendance paperwork might still be required.
3. Please note that some events where decision or actions have been taken prior to the reform effective date, will still be processed under the former CA regime.