OREANDA-NEWS. The Bank of Russia amends information disclosure procedure with respect to holders of depository receipts. This will facilitate quorum arrangements to hold general shareholders' meetings, including those of major issuers.

The Bank of Russia has published Ordinance No. 3995-U on its website to introduce alternative identification methods for depository securities holders.

Such identification is required for a foreign depository to exercise its right to participate in a general shareholders' meeting regarding shares with the rights identified by depository receipts. In this case it is obliged to disclose information to a Russian issuer on the holders of the receipts. According to the established procedure, the said information must contain a number and date of registration of such legal entity in the trade register or any other register of a state, where a legal entity is registered.

However, certain foreign institutional registrars find it difficult to collect such data. Alongside this, the formal incompliance with the requirement to include the number and the date of registration of the legal entity in the trade register or other register will significantly complicate presence of a quorum to hold general shareholders' meetings.

The new document stipulates that the address or LEI (Legal Entity Identifier), in addition to the name, will be sufficient to identify institutional holders of depository receipts. The said code allows unequivocal identity of a legal entity. LEI code introduction is intended to simplify the data collection procedure to hold general shareholders' meetings of the Russian issuers as well as harmonise data exchange formats for the market participants. At present the international identification code LEI may be assigned to the Russian legal entity at the Central Depository (Non-bank Credit Institution CJSC National Settlement Depository).

The Ordinance will become effective within 10 days from the date of publication.