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Shares in Joint Stock Companies Should Be Converted into Electronic Form by 29 October 2010

September 2010 - Finance. Legal Developments by Avellum.

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On 29 October 2010 the provision of the Law “On Joint Stock Companies” (the “Law”), dated 17 September 2008, onthe form of shares of Ukrainian joint stock companies will enter into force. The Law requires that by this date all sharesof all joint stock companies in Ukraine should be converted into electronic form and all further share issues after thisdate should also be made in electronic form. This requirement is indefinite and does not depend on the issuer’s size, itsamount of profits/losses, amount of assets or the number of shareholders, etc. 

Conversion of shares into electronic form involves a number of steps, which should be taken by the issuer: adoption ofthe decision to transfer shares into electronic form, conclusion of respective agreements with the depositary and thecustodian of issuer’s choice, publishing of the notification about the same of the issued shares in an official printedsource, reissue of the certificate on the issue of stock, suspension of servicing of documentary shares and transfer of theregisters of owners of documentary shares to the custodian. It normally takes up to three months to complete thedematerialization process under Ukrainian law.

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Avellum Partners

Avellum Partners are the legal experts in corporate finance. We provide legal advice to our clients with respect to their most significant business transactions in banking and finance, capital markets, mergers and acquisitions, and restructurings. We specialize in matters that require special attention, extensive experience and industry expertise. Avellum Partners have one of the largest professional teams of lawyers on the Ukrainian legal market specializing in corporate finance. The team consists of highly qualified attorneys trained in leading international law firms on most sophisticated transactions. In particular, most of the IPOs and Eurobond issuances by Ukrainian issuers were performed by the attorneys that now form the core of the professional team of Avellum Partners.

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