Private placingsSpecific regulation
Are there specific rules for the private placing of securities? What procedures must be implemented to effect a valid private placing?
Currently there are no specific requirements for private placements. The main set of requirements is vested in the SM Law and in the Standards and includes the general regulation of issuance and transferability of securities. The SM Law stipulates, among other things, two crucial rules:
- an initial offering (a procedure of placement to a first investor) is allowed only if an issue is registered in accordance with prescribed procedures and has obtained an appropriate identification number; and
- further transfers of securities are allowed only when securities are paid in full through the initial offering and fixation of its result in the form of report or notice on issuance results.
What information must be made available to potential investors in connection with a private placing of securities?
Private placement does not imply public disclosure of information except when an issuer has an obligation to disclose information (see question 15). With a private placing an issuer shall disclose to its investors the information related to securities, the extent of rights attached to securities and the order of exercise of such rights.Transfer of placed securities
Do restrictions apply to the transferability of securities acquired in a private placing? And are any mechanisms used to enhance the liquidity of securities sold in a private placing?
In addition to the aforementioned, the main regulatory restrictions related to the transferability of securities include satisfaction of an issuance procedure and full payment of securities in the case of the initial placing. Liquidity of securities usually could be maintained in a public case, (ie, after subsequent listing of securities and by means of using stock exchange instruments and contracts).