Russia: Regulation of DR programmes related to shareholder meetings and dividend payments

Note: Some of the information in this Announcement has since been amended (see our Announcement A13010).

On 7 December 2011, the Russian Federation adopted Law No 415-Z “On Amendment to Certain Legislative Acts of the Russian Federation” in conjunction with Law “On the Central Depository” (the 415-FZ Amendment), which is expected to have significant impacts on Depository Receipt (DR) programmes with Russian underlying equities.

In addition to the new obligations listed in our Announcement A12170, dated 13 September 2012, the 415-FZ Amendment also requires, as of 1 January 2013, that the identity of the Ultimate Beneficial Owners (UBOs) of the DRs be disclosed to the respective Russian issuer in the following cases:

• DR holders want to participate in voting at shareholder meetings;
• DR holders want to receive dividend payments.

At present, neither the methodology nor the consequences in cases of non-disclosure of such detailed information by the DR’s holders have been defined by the Russian regulator, the Federal Services for Financial Markets (FSFM). The effective implementation of the provisions related to shareholder meetings and dividend payments with regard to DR holders is also subject to the opening of specific “DR Programme Depo Accounts” by the newly formed Russian Central Securities Depository per DR issuer.

We continue to be in contact with relevant market players to analyse how to support customers in fulfilling this new legal requirement but, owing to the need for clarification by the FSFM, Clearstream Banking¹ is not in a position to disclose any information without the express consent of its customers. In addition, since the DRs are issued in jurisdictions outside the Russian Federation, there may be a conflict of laws relating to disclosure between the above-mentioned Russian requirements and those applicable to the issuer of the DRs.

In these circumstances, we will treat disclosure requests for voting and dividend payment by Russian issuers pursuant to the 415-FZ Amendment on a voluntary basis and will only disclose information upon receipt of an express form of consent from our customers.

Disclaimer

This Announcement does not aim to give any legal or tax advice and we strongly recommend that customers assess whether and how their business is impacted by the Russian Law.

It is the customer’s responsibility to fulfil all requirements that result from the introduction of the Russian Law and customers acting on behalf of their clients should analyse whether and how to support the processing for their clients.

In order to comply with all the requirements of the law, customers are requested to secure the advice and guidance of a professional tax advisor who is familiar with the relevant facts.

Further information

The information herein provided is based on information currently available in the market and is subject to further update. The release of more information may impact the details herein presented. We will provide further details as they become available.

For further information, customers may also contact Clearstream Banking Customer Service or their Relationship Officer.

1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in the Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500 (CBF) and Clearstream Banking, société anonyme, registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Register of Commerce and Companies under number B-9248 (CBL).