August-September 2013
NEWSLETTER

Introduction of the Procedure for Cancellation of the Shares Repurchased
by Joint Stock Companies without the Change of the Authorized Capital Amount

On 6 August 2013, the National Securities and Stock Market Commission (the "Commission") issued Resolution No. 1415 approving the Procedure for Cancellation of the Shares Repurchased by Joint Stock Companies without the Change of the Authorized Capital Amount ("Resolution 1415"). Resolution 1415 has become effective starting from 12 October 2013.

Resolution 1415 defines the procedural rules to be followed by a joint stock company (the "JSC") in case its shareholders decided to amend the JSC Charter in respect of the change of an amount and par value of the shares, which have been placed by the JSC, due to the cancellation of the shares, which were repurchased by the JSC, and the increase of a par value of remaining shares without the change of amount of its authorized capital.

According to Resolution 1415, the cancellation of the repurchased shares shall be performed simultaneously with the increase of a par value of the remaining shares. As a result, each share of a previous par value shall be converted into a new par value share having the same type and class.

It is worth mentioning that the registration of the issue of shares with a new par value shall be performed by the Commission or its territorial bodies on the basis of a legally defined set of documents filed by the JSC within 15 calendar days after the relevant changes to the JSC Charter have been registered. Once the documents are filed, the Commission has 25 business days to (i) complete the registration of the issue of shares with a new par value, or (ii) refuse the registration on the grounds specified by Resolution 1415.

Also, on 4 October 2013, the Commission's Resolution No. 1466 of 13 August 2013, which approved the Procedure for Determination of the Stock Exchange Price of Security ("Resolution 1466"), became effective.

Per Resolution 1466, the stock exchange price of a security shall be determined as of the day when the security was traded on a stock exchange, by calculating a weighted arithmetic average of prices of exchange-traded contracts (agreements) concluded on that day. The main components of the formula that must be used for the said calculation shall be the price of such a security and the number of securities of the same type. Additionally, Resolution 1466 establishes the requirements applicable to exchange-traded contracts (agreements) which shall be taken into account when calculating a stock exchange price of security.


For further information please contact partner Vadym Samoilenko
and senior associate Oles Kvyat

© Asters 2013
Web-site  |  Contacts