Please note that while the below describes the existing regulation substantial changes to the applicable legislation have been signed and are due to enter into force on 1 January 2020. These changes are aimed at simplifying the issuance process. LECAP will follow up with further publications regarding the new regime in the course of 2019.
Presently, the CB is authorised to consider each individual filing for registration of a new issuance.
An application can be made to register a new issue of shares together with a prospectus or to register a prospectus for an existing issue of shares if such issue was not accompanied with a prospectus at the time of the original registration.
Along with an application, issuers file a formal set of documents (including copies of the charter, the incorporation certificate, copies of shareholders’ decisions, etc) and main documents (a prospectus or a decision on issuance of securities and a prospectus depending on a type of application). The full set of documents and information that must be included are specified in the Standards and the RD.
The issuance decision is essentially the terms and conditions of the respective instrument. It sets out the key rights granted to the holder, the manner in which such securities are to be placed by the issuer, and other applicable details. The prospectus is a disclosure document. The structure of both the issuance decision and the prospectus is prescribed in detail in the Standards and the RD. Although the areas of disclosure covered by the Russian prospectus are very similar to those prescribed by the Prospectus Directive or requirements of internationally recognised stock exchanges, the exact requirements or the manner in which the information needs to be provided may vary greatly from the European standards, which is the reason why Russian issuance documents are often considered to be not as user-friendly as the European issuance documents.
General rules about disclosure of information by issuers (selling shareholders may be subject to the general rules about disclosure of information by issuers) are specified in the SM Law and the RD and these rules mainly require the disclosure of notices about material facts, issuance documentation (decisions on issuance, prospectuses and other), financial statements, quarter reports, etc. In accordance with the abovementioned rules, issuers will have to disclose some notices about the registration process and the main documents. Selling shareholders must only disclose obligatory notices. It is always possible to disclose any extra information subject to restrictions provided by the SM Law and the RD.
During the drafting of a prospectus, issuers must also take into account the recommendations of a stock exchange in respect which additional information is required and provide an in-depth description of particular sections of a prospectus.
Once the CB is satisfied, the issuer has to file an application for listing with a stock exchange (under the current legislation it is possible to place shares over the counter without any stock exchange but it imposes additional limitations on the issuer) and, as with the CB, the issuer must file a formal set of documents (a copy of the charter, the shareholders’ decisions, etc) and key documents that evidence the issuer’s compliance with the requirements of the listing rules of a particular stock exchange and for a particular level of listing.
With respect to debt instruments, the number of filings depends on the particular type of the instrument and the registration authority.
If an issuer plans to issue debentures and bonds that are registered by CB then the procedure is similar to the equity registration described above and the set of documents (as well as their content) are approximately the same.
If an issuer plans to issue debentures and bonds that are registered by a stock exchange then there will be only one filing with that stock exchange. The set of documents and their content are approximately the same as those filed with the CB.
Foreign issuers have the option of admission via the CB or admission via a stock exchange. The first option is a general variant, which requires registration of a prospectus by the CB and subsequent listing on a stock exchange. The second option is available for foreign issuers whose securities meet the special requirements specified by the SM Law and already have primary listing on one of stock exchanges that are on the list approved by the CB or a stock exchange.
The process for the first option is similar to the procedure of Russian securities registration by the CB but requires fewer documents. The process for the second option is similar to the registration of Russian debt securities by a stock exchange but requires fewer documents.
The general rules of disclosure are also applicable to foreign issuers and require them to disclose practically the same information as Russian issuers. Foreign issuers that use the second option may benefit from a simplified disclosure regime.
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