On 29 December 2012 the President signed Federal Law No. 282-FZ amending certain legislative acts of the Russian Federation.

Aiming to improve the procedure for the issuance of securities and the protection of shareholders’ rights, the Law amends several federal laws such as: “On the Joint Stock Companies,” “On the Securities Market,” “On Banking and Banking Activities,” the Tax Code and certain other legislative acts.

The amendments to the Securities Market Law mainly touch upon the procedure for the issuance of securities. In particular, they specify the exhaustive list of circumstances in which no state registration of a securities prospectus is required (in all other cases state registration is required). Also, the amendments concern the disclosure of information, the terms and procedures for payments on the securities, and the registration and exercise of the rights thereto. It is expected that the amendments will allow issuers to reduce the time and costs associated with the issuance and circulation of securities, and will lower administrative barriers for Russian issuers and build up the confidence of Russian and foreign investors in the Russian stock market.

The JSC Law has been amended to, among other things, include the following:

Charter capital increase

The JSC Law previously provided that the decision to increase charter capital by placing additional shares must include, among other things, an indication of the placement price of additional shares or the method for the determination thereof. According to the amendments, instead of an indication of price, the relevant decision may provide that the company’s board of directors set a placement price (or a method for its determination) before the company starts placing additional shares.

General shareholders’ meeting competency

The competency of a general shareholders’ meeting has been supplemented to include the power to decide on an application for the listing or delisting of the company’s shares and/or securities convertible into shares. The decision to apply for delisting requires a ѕ majority of the votes of shareholders owning the voting shares and participating in the general shareholders’ meeting, and is grounds for the shareholders who have voted against such decision or have not participated in the voting to request that the company buy out their shares. Such decision shall enter into force if the total amount of funds which is to be used to buy out the shares from the shareholders does not exceed ten percent of the value of the company’s net assets as at the date of such decision.

The rights of the shareholders owning preferred shares

The amendments establish an additional circumstance in which shareholders owning preferred shares of a particular type may acquire the right to vote at a general shareholders’ meeting. It occurs when the meeting is to decide whether or not to apply for the listing or delisting of shares of this type. Such decision is to be made by no less than ѕ of the votes of the shareholders owning the voting shares and participating in such general shareholders’ meeting, except for the votes of shareholders owning preferred shares of such type, and by ѕ of the votes of all shareholders owning preferred shares of such type (if the company’s charter does not provide for a higher threshold for making such decision).

Conversion of preferred shares

According to the amendments, if a company’s charter allows the conversion of preferred shares of a particular type into ordinary or preferred shares of another type, it also must provide for the procedures and conditions for their conversion before state registration of their issue has been started (and not upon the making of the relevant decision as was provided by the JSC Law before the amendments). No amendments can be made to such procedures and conditions of the conversion after the placement of the first share of the relevant issue.

The board of directors is to decide on the placement of such additional shares into which the preferred shares of a particular type, convertible into ordinary shares or preferred shares of other types, may be converted (provided that such placement is not related to the charter capital increase).


The amendments clarify the procedure for the payment of dividends, including, in particular: (i) the procedure for setting up the date by which the persons entitled to dividends are defined; (ii) the terms for the payment of dividends to the nominal holders of the shares; (iii) the procedure for the cash payment of dividends; and (iv) the terms for requesting the payment of dividends.


The amendments remove limitations on the placement of bonds by a joint stock company, except for the requirement that the bonds may be placed only after the company’s charter capital has been paid in full (the amendments to the LLC Law remove all similar limitations on the issuance of bonds by a limited liability company without exceptions). The amendments also clarify that the bonds of a joint stock company may be paid off, among other means, with the company’s placed shares according to the decision on their issuance.

The Law entered into force on 2 January 2013, except for a number of provisions (in particular, provisions on the procedure for the payment of dividends and decisions regarding the listing of the company’s shares) which will enter into force on later dates.

For further information please contact Igor Ostapets or Irina Dmitrieva in the Moscow office of White & Case, tel + 7 495 787 3000 .