Protection of property rights: A new accounting system for company shares has been launched in Ukraine

The National Securities and Stock Market Commission (NSSMC) informs that from now on, limited liability and additional liability companies and their members can transfer the accounting of shares from the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Organizations to the accounting system of shares of the National Depository of Ukraine.

The system has been in operation since March 2024, and SHPOLA-AGRO INDUSTRY LLC has already used the new service.

«Enabling company members to transfer share accounting from the Unified State Register to the Central Depository is a fundamental work of us as a regulator. The purpose of such accounting is to record the facts of acquisition and termination of rights to shares, restrictions on rights to shares and, of course, to protect the ownership of shares from unauthorized loss. I am confident that a new stage is opening for the market and this is another step towards digitalization and digitalization of processes», comments Maksym Libanov, Commissioner.

«The introduction of a mechanism for accounting for shares in LLCs and ALCs through the Central Depository’s share accounting system is a revolutionary innovation. One person will be able to combine their ownership rights to securities and a share in the company in one depository institution and use additional services offered by the Central Depository. For example, electronic meetings of shareholders, which is relevant in today’s environment. In addition, the use of escrow accounts to guarantee the fulfillment of obligations under share alienation transactions will increase the guarantees of creditors whose rights and claims are secured by a pledge of rights to a company’s share and will provide opportunities to expand the use of this type of collateral», says Maryna Adamovska, Member of the Management Board of PJSC NDU.

Accounting in the NDU system is:

– an additional mechanism for protecting ownership rights to company shares,

– guaranteeing compliance with the regime of restrictions on company shares (in particular, when pledging)

– an effective mechanism for guaranteeing the fulfillment of obligations under transactions involving company shares (escrow account),

– a technological method for holding electronic meetings of company shareholders,

– new opportunities for corporate events (payment of dividends and sending notifications through the accounting system),

– consolidation of the company’s investment portfolio in one depository institution.

For more information on the services of accounting for LLC and ALC shares, please visit the official website of the NDU at the link..