By October 2, 2014, all Russian joint stock companies (both open joint stock companies and closed joint stock companies) that maintain their own shareholder registers must transfer their registers to professional registrars. This obligation was introduced by Federal Law No. 142-FZ “On the Introduction of Changes to Part I, Section 1, Subsection 3 of the Russian Federation Civil Code”, dated 2 July 2013 (see Article 3.5). Before the new law took effect, joint stock companies (with certain exemptions) were permitted to maintain their own shareholders’ registers. Law makers noted that this practice had a drawback, being that in shareholder disputes, dishonest parties could make illegal records in the shareholders’ registers. The purpose of the new law is to compel joint stock companies to transfer their shareholders’ registers to professional registrars and, thereby, to avoid (or at least mitigate) violations in the course of recording rights to shares in the shareholders’ registers.

The registrar taking over the function of maintaining the shareholder register should have a valid license issued by the Bank of Russia (or the Federal Commission for the Securities Market/the Federal Services for the Financial Markets). Recently, the Central Bank of Russia has clarified the meaning of a professional registrar to mean an entity holding an official license as a professional participant in the securities market. The list of professional registrars is available on the official website of the Central Bank.

Based on the above, by October 2, 2014, all joint stock companies must (i) choose and approve the registrar and enter into an agreement with such registrar; (ii) transfer the register to the registrar; (iii) provide information on the registrar to the Unified State Register of Legal Entities (USRLE), and (iv) disclose information with respect to the registrar, if applicable.

Failure to perform this obligation will result in an administrative fine of up to RUB1 million for a legal entity, or up to RUB50,000 for its officers, who can also be disqualified for up to two years (Article 15.22(2) of the Russian Administrative Offences Code).