Member Article

Dear Sirs,

On November 27, 2009 the Order of the Federal Service on Financial Markets dated August 13, 2009 ¹ 09-33/pz-n “On peculiarities of the procedure of maintaining the register of registered securities’ holders by the issuers of registered securities” (hereinafter the “Order”) came into force. Pursuant to the Order, additional requirements for the procedure of maintaining the register of registered securities’ holders by the issuers of registered securities have been established.

We would like to draw your attention to the essential provisions of the Order:

1.       The Order has established requirements for ensuring the access of all interested parties to the rules of maintaining the register of registered securities’ holders (hereinafter the “Rules”) and has determined the way of ensuring the access.

Thus, for example, the Rules shall be available to all interested parties in the office of the executive body of a joint stock company or in the premises which are used for maintaining the register of registered securities’ holders.

Upon an interested party’s request a joint stock company shall provide an interested party with an authorized copy of the effective Rules within 7 days.

2.       The Order has established requirements for disclosure of the Rules and has determined the way of such disclosure.

Thus, for example, an open joint stock company (hereinafter “OJSC”) and a closed joint stock company (hereinafter “CJSC”) which have publicly placed (are placing) securities shall disclose the Rules on their web sites, which are used by joint stock companies to disclose annual reports, annual accounting reports, articles of association and other company’s internal documents.

CJSC which has not publicly placed shares is obliged to disclose the Rules on its web site / on other web site or by sending the authorized copies of the Rules to all persons registered in the register of registered securities’ holders.

3.       Joint stock companies which independently maintain the register of registered securities’ holders shall provide to territorial bodies of the Federal Service on Financial Markets annually, not later than February 15, reports with information indicated in the Order.

If disclosure of the Rules is made by sending the authorized copies to all persons registered in the register of registered securities’ holders, CJSC shall attach to the report the authorized copy of the Rules.

The officials and the joint stock companies may be subject to the following administrative liability in case of non-fulfillment of the Order’s requirements:

§         Failure to satisfy the requirements of procedure of maintaining the register of registered securities’ holders established by federal law and regulatory acts leads to imposition of an administrative fine on officials in the amount RUR5,000 – 10,000, and on legal entities – in the amount RUR100,000 – 300,000 (art. 15.22 of the Code on administrative offences of the RF);

§         Failure to provide or failure to comply with procedure and terms of provision to Federal Service on Financial Markets or to its territorial bodies reports, notices and other information set out by the legislation, or provision of incomplete and/or unreliable information, if these actions (omissions) do not constitute a criminal act lead to imposition of an administrative fine on officials in the amount RUR20,000 – 30,000 or up to 1 year disqualification for a term, and on legal entities – in the amount of RUR500,000 – 700,000 (art. 19.7.3. of the Code on administrative offences of the RF).

We would like to draw your special attention to the fact that the joint stock companies which independently maintain the register of registered securities’ holders shall bring their activity in line with the requirements of the Order by May 27, 2010.

The joint stock companies which independently maintain the register of registered securities’ holders shall provide the reports indicated in the Order to the territorial bodies of the Federal Service on Financial Markets by February 15, 2010.

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We hope the information above is helpful for you.

For more information on ALRUD Corporate practice please visit our Web-site

or contact directly ALRUD Senior Partner Vassily Rudomino [email protected]

and Partner Alexander Zharskiy [email protected]

Kind regards,

ALRUD Law Firm

Please note: We would like to draw your attention to the informational purposes of this newsletter and to the fact that it cannot be a ground for making a decision in each particular case. When preparing this newsletter all the information was taken from open sources only.