Under the Federal Law No. 208-FZ as of 26.12.1995 “On Joint-Stock Companies” (hereinafter – the “JSC Law”), a party intending to acquire more than 30 per cent of the total amount of an open joint-stock company ordinary and preferred voting shares (taking into account shares held by such party and its affiliated persons) may send a public offer to the open joint-stock company addressed to shareholders owing the shares of the corresponding classes, on the acquisition of their shares in such open joint-stock company (hereinafter – a “Voluntary Offer”).

When a party acquires more than 30, 50 and 75 per cent of the total amount of an open joint-stock company shares (taking into account shares held by such party and its affiliated persons) it becomes obliged to send a public offer to shareholders owning the remaining shares of the corresponding classes and to the holders of issuable securities convertible into such shares, to purchase such securities from them (hereinafter – a “Mandatory Offer”).

If a party becomes the owner of more than 95 per cent of the total amount of an open joint-stock company shares following a Voluntary Offer or a Mandatory Offer, such party becomes obliged to buy the rest of the shares of such open jointstock company held by other parties, as well as issuable securities convertible to such open joint-stock company shares, at the request of their holders. Such party shall, within 35 days after the date when it acquired the corresponding share of securities, send a notification to securities holders entitled to require that their securities shall be bought out, on such right to which they are entitled (hereinafter – a “Notification”). Furthermore, the JSC Law provides a right of a party holding 95 per cent of the total amount of an open jointstock company shares to send a buyout request in relation to such securities (hereinafter – a “Buyout Request”) within 6 months after the expiration of a Voluntary Offer or a Mandatory Offer acceptance term, if following the acceptance of the relevant offer not more than 10 per cent of the total amount of the open joint-stock company shares were acquired.

The procedure for a Voluntary Offer, a Mandatory Offer, a Notification and a Buyout Request is mainly regulated by the JSC Law, the Regulation on the Requirements to Certain Procedures in connection with the Acquisition of More than 30 per cent of Shares of Open Joint-Stock Companies, Approved by the Order of the FSFM of Russia N 06-76/pz-n as of 13.07.2006 (hereinafter – the “Regulation”), by the Administrative Regulation of Execution by the Federal Service for Financial Markets of the State Function on Implementation of the State Control of Share Acquisition of Open Joint Stock Companies (hereinafter – the “Administrative Regulation”) and by other regulations.

On March 31, 2013 the Order of the FSFM of Russia № 12-71/pz-n as of 09.08.2012 and the Order of the FSFM of Russia № 12-72/pz-n as of 09.08.2012 (hereinafter – the “Orders”) came into effect, introducing amendments to the Regulation and approving the new Administrative Regulation. The key amendments are the following.

I. Document submission procedure has changed

  1. The procedure of submitting amendments to a Voluntary or a Mandatory Offer to the FSFM has been established

Earlier, this procedure was not regulated.

  1. Revocation procedure in relation to a Mandatory Offer and amend- ments to a Voluntary or Mandatory Offer, provided by p. 2, cl. 84.4 JSC Law1, has been specified. The previous version of the Administrative Regulation provided that a Voluntary Offer could be revoked, inter alia, by a new Mandatory Offer. Thus, another (apart from sending a new Mandatory Offer) form of revocation was acknowledged. Now, a Mandatory Offer and the relevant amendments to a Voluntary or a Mandatory Offer may be revoked only by a new Mandatory Offer or new amendments to the Mandatory or Voluntary Offer.

II. Requirements to the list of docu- ments to be submitted to the FSFM of Russia have changed

  1. A document containing the volumeweighted average price of securities to be bought out, determined on the basis of a trading at a trade organiser six months before the request is sent to the FSFM, has been excluded from the list of documents to be submitted together with a Buyout Request.

Earlier, the Regulation provided such obligation to submit such document in cases when securities to be bought out had been traded (at a trade organiser) not less than for six months.

In the meantime, this requirement was not in compliance with clause 84.8 of the JSC Law, the provisions of which do not contain rules regarding the compliance of the buyout price of securities to their volume- weighted average price determined on the basis of a trading at a trade organiser in the securities market.

We assume that these amendments re intended to bring the Regulation in compliance with the JSC Law.

  1. The inserted amendments also relate to documents subject to submission to the FSFM together with a Notification. From now on, there is no obligation to submit the following documents:
    • a document provided by a selfregulating assessor organisation containing the confirmation of a market price of securities to be bought out, determined by an independent assessor in its assessment report, on the basis of such report review;
    • documents containing information under which a self-regulating assessor organisation is in compliance with the requirements of an authorized federal authority and has been elected according to a procedure established by such federal authority.

The submission of such documents was mandatory only upon Notification by par-ties which as of July 1, 2006 owned more than 95 per cent of the total amount of ordinary and preferred voting shares of an open joint-stock company. Such parties were obliged to buy out the rest of the shares of such open joint-stock company, as well as issuable securities convertible to shares, at the request of their holders, within the term provided by law, after sending the relevant Notification. Since a term during which such Notifications shall be sent has expired as of today 2, it has become unnecessary to regulate the procedure for such documents submission.

In addition, under p. 5, cl.7 of the Federal Law No. 7-FZ as of 05.01.2006 “On Amendments to the Federal Law “On Joint-Stock Companies”, a party that as of July 1, 2006 owned more than 95 per cent of the total amount of ordinary and preferred voting shares of an open jointstock company (taking into account shares held by such party and its affiliated persons) had a right to a buyout request in relation to shares in the open joint-stock companies owned by other parties. Such party could exercise such right thought sending a Buyout Request to the shareholders sent not later than by August 1, 2008. A Buyout Request had to be submitted together with, inter alia, documents mentioned above (a document provided by a self-regulating assessor organisation containing the confirmation of a market price of securities to be bought out, determined by an independent assessor in its assessment report, on the basis of such report review, and documents containing information under which a self-regulating assessor organisation was in compliance with the requirements of an authorized federal authority and had been elected according to a procedure established by such federal authority).

Notwithstanding the fact that these provisions have virtually lost their force, the Regulation still contains rudimentary provisions on the necessity to provide the documents mentioned above in cases provided by the Federal Law No. 7-FZ as of 05.01.2006.

III. The complaints procedure in relation to the actions (omissions) and resolutions of the FSFM of Rus- sia officials made in the course of state control over the acquisition of shares has changed

Under the JSC Law, state control over the acquisition of shares in open joint-stock companies shall be carried out by the Federal Service for Financial Markets.

The Orders provide an opportunity to send electronic complaints on the actions (omissions) and resolutions of the FSFM of Russia officials made in the course of state control in this field, including through the official web-site of the FSFM, through the federal state information system “The Unified Portal for State and Municipal Services (Functions)”, and by e -mail.

IV. The procedure of state control over the acquisition of shares in open joint-stock companies has changed

A number of amendments introduced by the Orders have been introduced for specification purposes. The key amendments are the following.

  1. The procedure for the provision of an order to bring a Voluntary or Mandatory offer, a Notification, a Buyout Request in compliance with the requirements of the JSC Law.

Earlier, when a corresponding order was sent to a share purchaser, the Federal Service for Financial Markets notified the issuer on such order. Now, in parallel with sending an order to a share purchaser, another order will be sent to the issuer, prohibiting actions related to sending a Voluntary or Mandatory Offer, a Notification, a Buyout Request, in relation to which the FSFM has issued an order to bring them in compliance with the requirements of the JSC Law.

  1. The FSFM actions in case when a bank guarantee is returned with a Voluntary or Mandatory Offer or a Notification, have been established.

It has been set forth that the FSFM is obliged to return the original of a bank guarantee after having received a request to return it in order to remedy the violations of Russian legislation from a party that sent such bank guarantee together with a Voluntary or Mandatory Offer or a Notification, if an order has been issued in relation to such documents to bring them in compliance with the requirement of the JSC Law.

It has also been specified that the corresponding files shall contain a certified copy of such bank guarantee.

  1. The procedure of calculating a term for consideration by the FSFM of documents connected with the acquisition of the securities of open joint-stock companies has been specified.

It has been set forth that during the term of consideration by the FSFM of documents connected with the acquisition of securities of open joint-stock companies commences on a day folliwing the date when such documents were submitted to the FSFM. If the last day of such documents consideration falls on a nonworking day, it has been set forth that the final day of such term shall be the working day immediately following such non-working day.

  1. It has been specified that the state function on implementation of the state control of share acquisition of open joint-stock companies shall be performed by the FSFM and its regional divisions free of charge.