The legal framework for Russia’s corporate actions reform has been approved and signed in to law, and will be effective from 1 July 2016.
The federal law was signed on 29 July by Vladimir Putin, President of the Russian Federation, and makes amendments to laws affecting joint-stock companies, those on the securities market, and the Russian central securities depository, National Settlement Depository (NSD), reflecting the key aspects of the corporate actions reform.
As of July next year, the new statutory provisions will change the approach to drawing up lists of security holders, and introduce a new procedure for exercising their rights in corporate actions, moving towards a centralised system through central securities depositories or registrars.
It will also authorise the CSD to use electronic data interchange formats to allow security holders to exercise their rights, and introduce new methods of participating in shareholder meetings such as e-proxy voting through a securities depository, or online e-voting.
A corporate information centre will also be established, with endorsement from the NSD.
The changes are intended to offer better protection for investors and reduce the cost of participating in corporate actions, while also reducing the risks involved.
International standards of corporate actions processing can be introduced, including ISO standards for data interchange, and e-voting and e-proxy voting allow for remote participation in shareholder meetings, and therefore a more accurate representation of shareholder views.
Both professional securities market participants and investors will have access to NSD as a single source of official information on corporate actions. A new online service will also be launched to act as the main channel of communication between the CSD and securities market participants in corporate actions reporting and processing.
