Dematerialization of shares
Dematerialization of shares is such a transfer of the form of existence of securities (shares) from documentary to non-documentary, due to which the registration of ownership rights to them occurs not with the help of a registrar, but in the depository form of accounting for property rights (custodian-depository).
In Ukraine, in connection with the existing law “On joint-stock companies”, all joint-stock companies are required, before October 30, 2010, to transfer the issue of shares to a non-documentary form of existence.
Such a process of dematerialization is always regulated by the following legal documents: 1. Regulations on the procedure for transferring an issue of registered shares of a documentary form of existence to a non-documentary form of existence, Decision of the SSMSC dated June 30, 2000 No. 98. 2.
Regulation on the procedure for replacing a certificate of registration of an issue of shares in connection with a change in the form of issue, Decision of the SSMSC dated January 26, 2005 No. 21.
Dematerialization of shares generally takes at least 3 months and consists of the following main steps: 1. Making a decision, which is made at the meeting of shareholders, when making a decision, shareholders are required to approve the custodian and depository who will participate in the dematerialization system.
The adopted decision in the form of a message is published in the official publication of the SSMSC. 2. Replacement of the certificate of registration of the issue of shares. 3. Transfer of the registry system from the registrar to the custodian.
Compliance with all the deadlines established by Regulation No. 98 is one of the important elements for the success of the entire dematerialization process, because the violation of at least one of the deadlines at the beginning, in the future, can become a threat to the next stages, as well as additional problems for the issuer and its officials.
Dematerialization of shares. The importance of this statement is best illustrated by a practical example.
The best means of self-control, as well as control over the activities of clients in this segment, is the development of a clear calendar plan for the entire dematerialization process, and of course, the definition of all documents required for submission at the appropriate stages.
And besides, many shareholders will want to learn in preparation for the general meeting with draft agreements with the custodian and the depositary institution, and this leads to the fact that contacts with a potential depository need to be established as quickly as possible.
Dematerialization of the share issue
According to Art. 20 of the Law of Ukraine “On Joint Stock Companies” shares of companies exist only in non-documentary form. And this means that it comes into force 2 years from the date of publication of this Law.
All joint-stock companies, registered shares that exist in documentary form, are obliged to bring their securities issues in line with the requirements of this Law before October 29, 2010.
The main document that regulates the procedure for transferring the issue of registered shares of a documentary form of existence to a non-documentary form of existence is the Regulation.
“On the procedure for transferring an issue of registered shares of a documentary form of existence to a non-documentary form of existence”. Approved by the decision of the State Commission on Securities and the Stock Market of June 30. 2000 No. 98.
The process in which the issue of registered shares of a documentary form of existence is transferred to a non-documentary form of existence has another name – Dematerialization of shares.
A non-documentary form of existence of shares is an account that is carried out by a custodian and is a confirmation of ownership of a security.
Shares dematerialization services:
First of all, this is the opening of accounts for the owners of shares, to which the shares will be credited. Dematerialization of shares. Maintenance of such accounts, and implementation of various operations on accounts. Advice on bringing the dematerialization of shares. Implementation of all stages of dematerialization.