Securities in the Russian Federation

Faculty of Law,
Master’s program the Corporate lawyer

“On the Securities Market,” dated 22 April 1996
Federal Law

No. 208-FZ “On Joint-Stock Companies,” dated 26 December 1995
Law No. 395-1 “On Banks and Banking Activity,” dated 2 December 1990
regulations issued by the Central Bank of the RF and the Federal Service for Financial Markets of the RF (on 1 September 2013 all the powers of the FSFM were transferred to the Central Bank of the RF)

compliance with a specific issuance procedure prescribed by the Securities

Law and which require registration with the Bank of Russia (
Non mass-issued (those which need not be registered)
In certain cases the Securities Law also requires a prospectus to be registered simultaneously with registration of the securities’ issue

Corporate and government securities

Documentary and non-documentary securities

investment unit of a unit investment trust,
bill of lading,

bond,
cheque
and the other securities named as such in a law or deemed as such in the procedure established by a law.

shares, corporate bonds, and other securities.
JSCs may raise capital

either by issuing shares to the public or by private placement.

Shares in a limited liability company are not deemed to be securities and cannot be used for raising capital from the general public.

fully or partly secured with:
a suretyship,
bank (independent) guarantee,

state or municipal guarantee,
or with a pledge (or a mortgage) over the issuer’s and/or third party’s property.

be issued through a simplified procedure, because the issuance, prospectus

and placement report do not need to be registered. However, the following conditions apply:
(i) the placement must be made through a public offering;
(ii) exchange bonds may not be secured by pledge;
(iii) the bonds must be issued in documentary form; and
(iv) the Bank of Russia must be notified of admittance to trading and placement on the stock exchange.
Commercial bonds are also issued in documentary form through a simplified procedure. Such bonds may not be secured by pledge. However, commercial bonds can only be placed by way of private offering.

Exchange”, dated 11 March 1997
Uniform Law for Bills of Exchange

and Promissory Notes (Geneva, 7 June 1930)

placement and/or public circulation in Russia

(i) by decision of either

a Russian stock exchange (if foreign securities have been listed abroad with any of 56 stock exchanges approved by the Bank of Russia);
ii) by decision of the Bank of Russia (if foreign securities are not listed with a stock exchange recognized by the Bank of Russia and are offered to the general public for the first time).

In both instances the foreign law governing the securities to be placed/offered must not restrict placement/public circulation of such securities in Russia.

recognized by the Bank of Russia, in order to list

them in Russia a foreign issuer has to comply with a number of requirements, the most important of which are:

registration of a Russian prospectus with the Bank of Russia;
obtaining permission of the Bank of Russia for placement of
foreign securities; and
assignment of ISIN/CFI codes.

without a nominal value stored centrally by the issuer (i.e. Russian

depositary), which certifies both the right to a specified amount of shares or bonds of a foreign issuer and the provision of services in connection with the realization of rights by a Russian holder of an RDR.
The first RDRs, which started trading on December 24, 2010 and listed on the MICEX SE (RUALR) trading platform and RTS (RUAL trading code) on December 16, 2010, are RDRs for common shares traded on the Hong Kong Stock Exchange The incorporated company "Rusal", which is registered on the island of Jersey (jurisdiction of Great Britain).

Securities Exchange Act of 1934

US Sarbanes-Oxley Act 2002

Uniform Commercial Code

Revised

Model Business Corporation Act

Blue sky laws – laws of States

Acts of United States Securities and Exchange Commission (SEC)

(stocks)

debt securities

options

convertible bonds

Share certificate

pension and investment funds and banks)
Minor Investors

Depositaries (a little)

Clearing corporations

Depository Trust

Company, DTC (a subsidiary of the New York Stock Exchange)

Nominee of DTC - Cede and Company (Cede & Co.) – in fact possess of over 70% of all shares traded on the US stock market

Legal, or nominal owner, record owner:

Brokerage company

Trustee

Beneficial owner – shareholder

Shares are able to be traded if form of bearer papers

“Floating supply” – Who are beneficial owners???