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Issue of securities
The procedure of issuing securities
The procedure of issuing securities is the sequence of actions of the issuer for the placement of equity securities established by the Federal Law “On the Securities Market”. Equity securities may be registered or bearer. Registered issue-grade securities may be issued only in non-documentary form, except in cases that are established by federal laws. Issue-grade securities to bearers may be issued only in documentary form. The state registration of issues (additional issues) of issuance securities is carried out by the Bank of Russia (registration authority). During the state registration of issued securities, it is assigned an individual state registration number.
The objectives of issuing securities
The objective of the issue is to gather the necessary funds. Securities may be issued by issuers for one of the following purposes:
- formation of the authorized capital upon establishment;
- increasing of the authorized capital;
- consolidation or splitting of previously issued securities;
- reorganization of the joint-stock company;
- change in the scope of rights granted by previously issued securities;
- replenishment of own capital;
- the attraction of borrowed investments.
Types of issue of securities
Depending on the pursued objective of the ongoing issue, the following types of issue of securities may be distinguished:
- Issuance of shares issued at the establishment of a joint-stock company;
- issue of additional shares of the company by sharing among shareholders;
- Issuance of shares by converting in case of a change in par value in case of modified rights upon consolidation and splitting;
- issue of securities through subscriptions;
- bond issue upon the bond program;
- the bond issue that is Mortgage-Backed;
- issue of exchange-traded and commercial bonds;
- issue of housing certificates;
- issue of Russian Depositary Receipts;
- issue of securities by converting convertible securities into them;
- issue of securities subject to placement during the reorganization of legal entities.
The requirements for the implementation of these activities and their features are established according to the sections of Provisions on issue standards of securities.
Procedures of issuance: stages of emission
The standard procedure for issuing securities includes the following steps:
- making a decision on the toplace the securities or another decision that is the ground for the placement of securities, for example, a decision on an additional issue of securities;
- approval of the decision on the issue (additional issue) of securities. The decision on the issue (additional issue) of securities must be approved no later than six months from the date of the decision on their toplace. The decision on an additional issue of securities is approved by the board of directors (supervisory board) or the management body that performs the functions of the board of directors (supervisory board) of this economic company according to Federal Laws (clause 3.2 of the Issue Standards);
- state registration of an issue (additional issue) of securities or assignment of an identification number to an issue (additional issue) of securities. For the state registration of an additional issue of securities, the documents established by the Issue Standards are submitted to the registering authority. The requirements for documents submitted to the Bank of Russia are established by clauses 1.6, 1.7, 1.9, 1.12 of the Provisions on issue standards of securities;
- toplace of securities. Toplace of securities includes: transactions aimed at the alienation of securities to their first owners; making credit entries on personal accounts (deposit accounts) of the first owners (in the case of placement of registered securities or documentary bonds with mandatory centralized storage); issuance of certificates of documentary bonds to their first owners (in case of placement of documentary bonds without obligatory centralized storage);
- state registration of a report on the results of an issue (additional issue) of securities or submission of a notice of the results of an issue (additional issue) of securities. A report (notice) on the results of an issue (additional issue) of securities shall be submitted by the issuer to the registering authority not later than 30 days after the end of the securities toplace period that is specified in the registered decision on the issue (additional issue) of securities and if all the securities were toplaced before the expiration of this period that is not later than 30 days after the placement of the last security of this issue (additional issue).
State registration of an issue (additional issue) of securities may be accompanied by the registration of a securities prospectus and in case of toplace of securities through subscriptions, it must be accompanied by the registration of a securities prospectus, with the exception of those specified by the Provisions on issue standards of securities (established by the Bank of Russia from August 11, 2014 N 428 -P) cases.
Working with the specialists of The Tsentralny Okrug Law Firm has competitive advantages:
- High professional skills and intellectual potential of employees
- Application of modern legal methods
- Full accompaniment of the procedure of issuing securities and all formalities of this procedure
- Consultations of specialists and free rapid assessment of documents for free
- The current loyalty program for regular customers
Due to our vast experience in the area of corporate legal issues, the specialists of the Tsentralny Okrug Law firm will promptly and on agreed terms provide legal support for the issue of securities.
Author is Dmitry Prosvirin