Russian Joint Stock Companies Will be Required to Have a Professional Registrar Starting from October 2014

September 18, 2014

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.