Amendments to Russian Securities Law Aim to Enhance Transparency and Corporate Disclosure

This month, Russian President Dmitry Medvedev signed into law amendments to his country’s securities legislation. He signed the Federal Law No. 264-FZ to amend provisions of Federal Law No. 39-FZ “On Securities Market.” The State Duma, the Parliament’s lower house, and the Federation Council have all adopted the new amendments, which went into effect on October 7. However, the new amendments, however, are not applicable to non-publicly traded companies that have less than 500 shareholders.

The amendments are geared towards improving corporate disclosure and transparency. The list of who can receive relevant information and those that must disclose data are specified. For example, Russian securities issuers must now disclose financial reports, including those filed in accordance with International Financial Reporting Standard, as well as accounting reports. They must also reveal the identities of primary beneficiaries of controlled entities and controlling shareholders’ identities. Signs of insolvency should be included in disclosed information about beneficiaries and shareholders. Companies must also provide information about board meetings and not just annual general meetings.

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