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SECURITIES REGULATION
Securities and Issuance
Securities regulation is one of the fundamental and most complex areas of Russian law. All Russian securities can be divided into two main groups:
(1) issue securities (these can be defined very broadly as securities with equal parameters and characteristics simultaneously issued by the same issuer) and
(2) all other instruments that under Russian law have the features of securities. The concept of issuance is relevant only to issue securities.
Issuance of securities can be defined as the actions that must be taken by an issuer to issue securities (i.e., to place securities among their first holders). Russian legislation sets out very detailed procedures for the issuance of securities.
Procedure and Requirements
All issue securities are subject to the state registration. The process of issuance of securities may be summarized broadly as follows:
(1) adoption of a decision to issue securities and preparation of the relevant documents, including, if applicable, the prospectus;
(2) registration of issue securities and, if applicable, of the prospectus;
(3) disclosure of the relevant information;
(4) placement of issue securities;
(5) registration of the report on the results of the issuance; and
(6) disclosure of certain information, upon placement of the issue securities.
The three main groups of issue securities are
(1) state and municipal securities;
(2) corporate issue securities; and
(3) issue securities of banks and other credit institutions.
They are divided into these groups based on the entity issuing them. Each group of issue securities is governed by a corresponding set of legislative requirements.
The specific procedures and requirements connected with the issuance of securities also depend on many other factors. For example, there are different procedures and requirements applicable to the issuance depending on the types of issue securities (e.g., shares, bonds etc.), on the methods of their placement (open or closed subscription), on the involvement of third parties in the placement of issue securities (i.e., placement through a stock exchange), and so on.
Moreover, depending on the type of issuer and the nature of its activities, it may be subject to limitations for the issuance of certain types of securities or public offerings of securities.
Russian Legislation
Many areas of Russian legislation (such as currency control rules, tax implications, anti-monopoly regulation, etc.) have an impact on the issuance of securities and may be critical while structuring and participating in a particular securities deal. Russian corporate rules must also be observed carefully.
Foreign Investment and Placement Abroad
Foreign investment in Russian "issue" securities within Russia, and permission for placement and circulation of Russian "issue" securities abroad, are two more important aspects of Russian securities regulation.
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