Securities administration - Russia
Income collection
Dividend payment
Dividends are approved and announced at the Annual General Meeting (AGM). Some companies may announce interim dividends at an Extraordinary General Meeting (EGM), but this is the exception rather than the norm. The majority of companies, if they pay out dividends, do so once a year. Entitlement is based on settled positions on Record Date (RD). RD is typically no later than 20 calendar days from the date of the shareholders meeting (and additionally, not earlier than 10 calendar days from the date of the shareholders meeting where the shares are publicly traded).
In the Russian market there is no concept of Ex-Date and Payment Date, only Payment Period is defined.
Dividend income is paid by the issuer (and rarely a paying agent) to the nominee holder of the securities. For all RUB-denominated securities, payment is made in RUB. Dependent upon the issuer, income could be paid in a lump sum for the total nominee holding for all clients or on a client by client basis. Typically, the issuer does not pre-advise payment and as there is no announced Pay Date. It is best practice for nominee holders to closely monitor their accounts on a daily basis for receipt of income.
Effective from 1 January 2014, the timing to receive dividend payments has been reduced. An issuer must pay out dividends within 10 business days from the Record Date (such Record Date is approved by the AGM/EGM and shall be fixed after the AGM/EGM date).
Coupon payment
All coupon rates are fixed for Russian securities issued to date and therefore the rates are provided at the time of issuance of the security. For most issues, the coupon payment frequency is either once or twice a year.
Corporate actions
Most common corporate events
The Russian market is not very developed in the range of corporate actions commonly processed. The standard and most common types are shareholders meetings and dividend payments. The other more common types are bonus issues, share buy-backs, tender offers, spin offs, subscriptions for new shares and stock splits. Such corporate actions are straight forward and follow general capital market principles: details are announced at an AGM/EGM. It is important to note that, as the field of corporate actions is not as developed as in other markets, it is not unusual for domestic issuers to create specific requirements and practices per security and per corporate action.
Depending on the issuer’s decision, there can be additional requests for statutory or financial documents from beneficial owners in order to participate in some voluntary corporate actions. These documents must be notarised and apostilled before sending to Deutsche Bank Moscow. These documents will be translated and the translation notarised when Deutsche Bank Moscow receives them.
Organisation of AGM/EGMs
The AGM season is generally between April and June of each year while EGMs can be announced at any time. Meetings are typically announced by the issuer 30 days prior to the meeting itself.
The issuer is obliged to provide written details to its registrar and to all of the nominee holders of their stock. Given the location of some issuers nominee holders can often receive such notices late and so it is common practice to search through all sources including the local press and other agencies for details of planned meetings.
All holders of ordinary shares are entitled to vote. Some issuers also grant voting rights to preferred shares and this would be detailed in the charter of that issuer. Whether the meeting requires physical attendance or postal ballots may be detailed in the particular announcement and defined by the issuer. If proxy voting is required or requested, the proxy must attend the meeting with the relevant ballots plus a Power of Attorney empowering him to vote on behalf of the beneficial/legal owner.
Split voting is not common practice due to the lack of recognition of foreign nominee ownership of stock. Any split votes are permitted only at the discretion of the issuer themselves and cannot be guaranteed.