AO UniCredit Bank
Thu, 09/04/2020
The Federal law # 115-FZ dated April 7, 2020 (the “Law”) introduced temporary changes to adjust Russian regulations to the current epidemiological situation and the high volatility of the securities market.
According to the Law:
- Annual general meetings (“AGMs”) of Russian joint stock companies in 2020 shall be scheduled within the first 9 months of the year (instead of the standard 6 months deadline). This year AGMs may be conducted in the form of remote meetings only.
- 2019 annual financial reports of public joint stock companies shall be disclosed within the first 210 days of the current year, while the intermediary reports for the first 6 months of 2020 - within 180 days upon expiration of the reporting period (instead of the standard deadlines of, respectively, 120 and 60 days).
- Until the end of 2020 the listed companies may buy back their shares if, at any time, the average tri-monthly share price and the stock exchange index decline by more than 20% compared to the last quarter of 2019. Such acquisitions shall be executed on the stock exchange via a broker appointed by the issuer, on FIFO basis. The issuers may either disclose or not disclose preliminary notifications on such buy-backs, subject to the decision of the board of directors.
- The decline of a joint stock company’s net assets below its registered capital by the end of 2020 shall not trigger the reduction of the registered capital or the liquidation of the company.
Impact on investors: The key immediate impact of these changes is the extension of the corporate actions season in Russia in 2020. As the AGMs this year may take place until the end of September, the dividend payments and corporate actions triggered by the AGM results may happen later than usual. Buy-backs specified above shall not be classified as corporate actions as they are going to be performed via a broker and not cascaded through NSD, and therefore they will not be processed by the custodians.