A new Law on Securities Market was adopted on 5 January 2015 and will come into force on 11 July 2015.
The current Law on Securities and Stock Exchanges was adopted in 1992 but since then has not been subject to substantial changes and therefore became obsolete as it does not correspond to modern market requirements.
In the new Law a significant part of the terminology is refined, the provisions of several current legal acts are incorporated and many provisions related to the issue, circulation and redemption of securities, information disclosure, and professional services with securities have been revised.
The new Law systematises cases of mandatory information disclosure and establishes additional circumstances subject to disclosure. In particular, an issuer should disclose essential facts related to its business, which can influence the securities price.
Examples of essential facts include:
- the issuer entering into major transactions and transactions with affiliates;
- the issuer entering into transactions with at least five per cent of shares of its own issue (excluding privileged shares);
- reorganisation and liquidation of the issuer or its subsidiaries;
- commencement of insolvency (bankruptcy) proceedings in respect of the issuer;
- payment of dividends, interest on bonds, and the like.
A unified securities market information resource will be created in Belarus, covering the following information:
- issue of securities by way of public offering and public sale;
- essential facts related to issuers’ business;
- acquisition of ordinary shares by persons obliged to disclose such information.
The unified information resource will also contain the annual reports of issuers, excluding reports of closed joint-stock companies which issue shares only.
The Law entitles issuers to place their shares outside of Belarus, including by way of public sale. Currently, placement of shares by way of public sale is possible only through the Belarusian Currency and Stock Exchange. Nevertheless, it is too early to state that a sufficient legal framework has been formed enabling Belarusian issuers to enter foreign capital markets due to adoption of the new Law.
The Law establishes the procedure for admission of securities of foreign issuers for placement and circulation in Belarusian territory.
Securities of foreign issuers should be admitted for circulation after they are:
- assigned an International Securities Identifying Number (ISIN) and Classification of Financial Instrument (CFI) Code; and
- qualified as securities in the territory of Belarus. The process for qualification will be established by the Council of Ministers.
Placement of securities of foreign issuers will be possible only if an agreement is in place determining the procedure for cooperation between the Ministry of Finance and the authority regulating the securities market in the country of the foreign issuer. Securities of foreign issuers will be admitted for placement after registration of a securities issue prospectus with the Ministry of Finance, deposit of the securities issue or part with the Belarusian depository system and assignment of ISIN and CFI Codes.
Securities of foreign issuers should be placed and circulated only within the organised market, i.e. in the trade system of the securities trade organiser, including the stock exchange.
The new Law explicitly provides for the possibility to enter into margin transactions, i.e. involving use of funds and securities lent by a broker to its clients.
Current legislation does not contain requirements as to the price in case of a share buy-out. Under the new Law the price is defined as the highest of the following:
- the maximum price paid during the past six months for the shares (except for privileged shares) by the person making the buy-out offer); and
- the maximum average price of shares in each month of the preceding semi-annual period, calculated according to the results of trading on the stock exchange.