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The Central Bank has changed disclosure rules for issuers

22.05.2020
8 min read
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Pepeliaev Group advises that the Russian Central Bank (the “Central Bank”) has adopted a new version of the Regulations “On the disclosure of information by issuers of securities” to improve and simplify the disclosure procedure

On 13 May 2020, new Regulations of the Central Bank “On the disclosure of information by issuers of securities” [1] (the “New Regulations”) were published to replace the current Regulations of the Central Bank dated 30 December 2014[2] (the “Current Regulations").

Under the New Regulations, issuers will no longer have to publish excessive volumes of information, including duplicated data (as such data should have been disclosed in different formats), while investors will be able to familiarise themselves with the most material terms and conditions of an issue. The New Regulations being adopted will not affect the level of information transparency of the securities market.

Please note that the new rules will come into effect in more than a year's time, i.e. starting from 1 October 2021. The period for the entry into force of the New Regulations is provided so that the participants in the securities market have enough time to prepare themselves for the new changes.


A requirement has been ruled out for information that is immaterial for investors

Under the New Regulations, starting from 1 October 2021 issuers will be released from an obligation to disclose the documents below in online news feeds (a “News Feed”)[3] of agencies accredited by the Central Bank to disclose information regarding securities and other financial instruments:

  • the annual report;
  • the annual financial statements;
  • a list of affiliates;
  • the quarterly report;
  • the consolidated financial statements.

At present (as at 21 May 2020) according to the information posted on the official website of the Central Bank, such accredited agencies include:

  • Interfax - the Centre for Disclosing Corporate Information;
  • The Analysis, Consulting and Marketing;
  • The System for Integrated Disclosure of Information and News;
  • The PRIME Agency of Economic Information;
  • The Association for Protecting Information Rights of Investors.

Further, after the New Regulations come into force on 1 October 2021, issuers will no longer have to post on a News Feed information regarding material facts of little practical value for the securities market or that duplicates information from publicly available sources, such as the EGRUL[4], the Federal Resource[5] and the official website of the Central Bank.

Such information as is published today in a News Feed and is not required to be disclosed after 1 October 2021 includes information regarding for example:

  • agreements concluded or terminated with a management company, specialised depository, registrar, appraiser or auditor of an issuer that is a joint-stock investment fund;[6]
  • agreements concluded with a Russian securities market operator for the issuer’s securities to be included in the list of securities admitted for trade by the securities market operator, as well as an agreement with a Russian stock exchange for the issuer’s securities to be included in the list of such Russian stock exchange;[7]
  • an application filed by an issuer to obtain authorisation from the Central Bank to place and/or arrange for the trading of its securities outside Russia and that it has obtained such authorisation.[8]

At the same time, the list of information regarding material facts has been supplemented within the New Regulations. An example is that, in future, issuers will have to disclose information about transactions consummated by companies controlled by such issuers or those that are relevant for them and in which they have an interest[9].

The full list of information disclosed in the form of statements about material facts is provided for by clauses 13.9.1 to 13.9.37 of the New Regulations.


New methods for calculating financial figures

The New Regulations being adopted also changes the rules for calculating financial figures of issuers. Starting from 1 October 2021, information about an issuer’s financial standing that needs to be published in the issuer’s prospectus for securities and in its report can be generated based on international financial reporting standards (“IFRS”).[10]

The figures recommended at present for generating a report on an issuer’s financial standing are stipulated in Appendix 3 to the Current Regulations.[11] Once the New Regulations come into force, the figures will change and it will be proposed to issuers to report their financial standing by using new indicators of financial performance and methods for calculating them[12] which approximate to international standards (e.g. EBITDA[13]).


New reporting deadlines for an issuer

The New Regulations provide for an extended (as compared with the current rules) period during which an issuer does not have to publish its report or disclose the list of affiliates.

After the new rules start to apply to the disclosure of information, it will be required to submit the list of affiliates every 6 months (for the first and second half of the calendar year).[14] At present, a list of affiliates is disclosed quarterly.[15]

Further, the deadlines will change for disclosing an issuer’s report. Starting from 1 October 2021, issuers will have to submit their reports every six months: for six months - based on interim (consolidated) financial statements, for 12 months - based on the annual (consolidated) financial statements.[16] The Current Regulations obligate an issuer to disclose information in the form of a quarterly report.[17]

A report of an issuer’s group will be disclosed within 30 days from the date when the annual consolidated or interim financial statements have been disclosed[18].


Disclosure of consolidated financial statements

The New Regulations recommend that issuers use a new procedure for generating financial figures that characterise the financial results of such issuers’ operations. The information disclosed in the prospectus for securities and in interim reports is primarily relevant for potential buyers of securities.

The general rule is that such figures will be calculated based on the issuer’s (consolidated) financial statements. The financial figures will be calculated based on the issuer’s financial statements only in cases when the issuer does not have to submit its consolidated financial statements under the legislation[19].

Please be reminded that the following issuers are not required to submit consolidated financial statements:

  • special purpose vehicles and mortgage agents;
  • small- and medium-sized enterprises whose securities are not listed on a stock exchange;
  • where only a prospectus for an issue has been registered with respect to securities, provided that such shares have not been admitted for organised trading.[20]

An issuer will have to indicate on the basis of which financial statements ((consolidated) financial statements or financial statements in a prospectus for securities the information is disclosed regarding its financial and business activities.

Please be reminded that under the Federal Law “On consolidated financial statements” consolidated financial statements are understood to mean systematised information reflecting the financial results of a company which together with other companies and/or foreign companies is defined under the IFRS as a group[21].

Therefore, if the financial statements that an issuer indicates are consolidated financial statements, it should be additionally stressed that information regarding financial and business activities in the prospectus for securities reflects the activities of the issuer’s group[22].


Help from your adviser

Pepeliaev Group's lawyers are keeping track of changes in legislation and are ready to provide legal support with respect to corporate and registration procedures, as well as to comment on contentious matters connected with applying the new items of legislation. Among other things, we will reach out to the Bank of Russia and other state authorities for official clarifications on issues stemming from the performance of regulatory acts regarding corporate relationships.




[1] The Central Bank’s Regulation No. 714-P “On the disclosure of information by issuers of securities” dated 27 March 2020 (registered under No. 58203 with the Russian Ministry of Justice on 24 April 2020), will come into force on 1 October 2021

[2] The Central Bank’s Regulation No. 454-P “On the disclosure of information by issuers of securities” dated 30 December 2014 (registered under No. 35989 with the Russian Ministry of Justice on 12 December 2015)

[3] Clause 1.3 of the New Regulations

[4] ERGUL means the Unified State Register Of Legal Entities

[5] EFRSFDYuL (same as EFRS, or the Federal Resource) means a Unified Federal Register of Legally Relevant Information Regarding the Business of Legal Entities, Individual Entrepreneurs and other Business Entities

[6] Clause 12.7.2(17) of the Current Regulations

[7] Clause 12.7.18 of the Current Regulations

[8] Clause 12.7.23 of the Current Regulations

[9] Clause 35.3 of the New Regulations

[10] The Russian Government’s Resolution No. 107 “On approving the Regulations on recognising IFRS and the Clarifications to IFRS in the Russian Federation” dated 25 February 2011”

[11] Clause 2.1 of Appendix 3 to the Current Regulations

[12] Clause 2.2 of Appendix 2 to the New Regulations

[13] Earnings before Interest, Taxes, Depreciation and Amortization. EBITDA stands for earnings (or losses) before interest, taxes, depreciation, and amortization costs

[14] Clause 64.2 of the New Regulations

[15] Clause 73.3 of the Current Regulations

[16] Clause 12.1 of the New Regulations

[17] Section IV of the Current Regulations

[18] Clause 12.1 of the New Regulations

[19] Clause 2.2 of Appendix 2 to the New Regulations

[20] Clause 52.2 of the New Regulations

[21] Article 1(3) of Federal Law No. 208-FZ “On consolidated financial statements” dated 27 July 2010

[22] Clause 9.3 of the New Regulations

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