Following the bail-in of Bank of Cyprus Public Company Limited (“BOC”) and the imposition of a 47.5% haircut on deposits over €100,000, shares in the capital of BOC were issued1. These shares are not listed2 and until listing will not be dematerialized. However, notwithstanding that they are still in law shares carrying the normal rights attaching to shares, which includes the right of sale/transfer, it was not until recently, that the procedure to be followed on transfer was clarified. At the end of January, 2014 the board of directors of BOC approved the procedure to be adopted in giving effect to a transfer, which procedure will apply until the shares of BOC are admitted to listing on the Cyprus Stock Exchange.
This decision and the procedure approved recognises the inherent transferability of these shares as a matter of law and further provides that the title and interest of any transferee will be recognised and enforced as upon a transfer the register of members will be written up to record the transfer. This is of particular significance since in accordance with the provisions of the Companies Law, cap. 113 (as amended):
- a person only becomes a member (i.e. shareholder) upon his name being entered in the register of members3;
- the register of members is prima facie evidence of ownership and title to shares4.
As a matter of Cyprus Companies Law5, no share in a company can be transferred unless an instrument of transfer is produced duly signed by the transferor and transferee. The procedure approved by the board of BOC requires the delivery to BOC of such an instrument of transfer together with any share certificate representing those shares to the extent BOC has issued one6.
The original instrument of transfer and the share certificate must be delivered to BOC together with the following additional documents7:
- If the transferor or transferee is a natural person:
- valid ID card or passport;
- proof of residential address not older than 6 months,
each of which needs to be certified by a Cyprus certifying officer or apostilled.
- If the transferor or transferee is a legal entity:
- original certificate confirming the members of the board of directors or other governing body issued by the relevant authority in the country of incorporation. This certificate must not be older than 1 month and must be apostilled.
- certified copy of a resolution of the board of directors or governing body approving the transfer and nominating relevant persons to sign the instrument of transfer. This must be signed by at least 2 directors and be certified by a certifying officer or apostilled.
- valid ID card or passport of person nominated to sign, which must be certified by a certifying officer or apostilled; and
- proof of residential address of such person not older than 6 months which must be certified by a certifying officer or apostilled.
The approved procedure also makes provision for the transfer of shares of a deceased person.