Securities issue

Creation of a joint-stock company

During the formation of a company its shares are subject to private placement exclusively among the founders. Creation of a partnership is carried out in the following stages:

1) holding of the founders’ meeting, at which decisions are taken on:

• creating a partnership
• identification of the authorized person (s) of the founder (s) (name, first name and patronymic – for an individual, name, code under the USREOU, location and telephone numbers (fax) – for a legal entity), which (s) empowered to carry out activities related to the creation of a partnership (if necessary);
• private placement of shares;
• approval of the terms of the founding agreement (in the case of a decision to conclude a founding agreement).

In case of foundation of a joint-stock company, one person’s decisions, which must be taken by the founders, are taken by this person alone.

2) the conclusion of a constituent agreement (in the case of the decision of the founders to conclude a founding agreement by the founders);

3) submission of the application and all necessary documents for registration of issue (issue) of shares to the central apparatus of the Commission;

4) registration by the Commission of the issuance (issue) of shares and issuance of a temporary certificate (temporary certificates) on registration of issue (issue) of shares;

5) assignment of shares to the international identification number of securities;

6) conclusion of a securities servicing agreement with the Central Depository of Securities;

7) registration and deposition of a temporary global certificate in the Central Securities Depository;

8) private placement of shares among the founders of the company;

9) payment by founders of the total nominal value of shares;

10) holding constituent assembly, where decisions are made on:

• foundation of a company;
• approval of valuation of property, property and non-property rights, which are made by the founders for the payment of shares of a company, determined in accordance with Article 8 of the Law of Ukraine “On Joint Stock Companies”;
• approval of the results of private placement of shares among the founders of the company;
• approval of the company’s charter;
• formation of the bodies of the society;
• election of members of the supervisory board, chairman of the collegial executive body of the company (the person exercising the powers of the sole executive body of the company), members of the audit committee (auditor);
• election counting commission;
• Authorization of the representative (representatives) to carry out further activities related to the formation of the partnership (if necessary);
• committing other actions necessary for the establishment of a partnership.

In case of foundation of a joint-stock company, one person’s decisions, which must be taken by the constituent assembly, are taken by this person alone;

11) registration of the company and its statute in the state registration bodies;

12) submitting to the central body of the Commission a report on the results of private placement of shares;

13) registration by the Commission of the report on the results of private placement of shares;

14) obtaining a certificate (certificates) on registration of shares issue (issues) and a registered report on the results of private placement of shares.

15) registration and deposit of a global certificate in the Central Securities Depository;

16) the issuance to the founders of the company of documents confirming the ownership of the shares.

Registration of issue (issue) of shares, registration of the report on the results of private placement of shares or refusal in the appropriate registration shall be made by the Commission.

For documents that are submitted for registration of shares issue can be found at the link.

Registration of shares issued by joint stock companies with a state share in the authorized capital that was created prior to the entry into force of the Law of Ukraine “On Securities and the Stock Market” (the issue of shares of which is not registered in the manner prescribed by law), and the transfer of such issues to the Depository Registry system is carried out in accordance with a separate Order approved by the Commission decision.

Registration of share issue of joint stock companies, including holding companies, when they are created by corporatization of state enterprises or in the process of privatization of state enterprises, enterprises formed on the basis of leased property and based on the association of property of various forms of ownership, is regulated by a separate Procedure approved Commission decision.

Increase and decrease of authorized capital

In case of public or private placement of additional shares in case of increase of the authorized capital of the company with attraction of additional contributions, registration of issue of shares, prospectus of issue of shares and registration of the report on the results of public or private placement of shares is carried out. Registration of share issue and share issue prospectus is carried out simultaneously.

When increasing the authorized capital of the company due to the allocation of the additional capital (its parts) to the authorized capital of the company or the direction to the authorized capital of the profit (its part), registration of issue of shares is carried out, the report on the results of the placement of shares to the registration authority for registration is not submitted.

When decreasing the company’s authorized capital by reducing the nominal value of shares or by canceling previously repurchased shares of the company and reducing their total quantity, the share issue registration is registered, the report on the results of the placement of shares to the registration authority for registration is not filed.

More information about the increase and decrease of the authorized capital of joint stock companies can be found at the link.

The issuance of shares (as well as the registration of such issues and the suspension of their circulation) of joint-stock companies, which are created by merger, division, separation or transformation, as well as joint stock companies, which are subject to accession, is regulated by a separate Procedure approved by the Commission’s decision.

General terms

Issuers can place ordinary (unsecured) and secured bonds. Bonds may be considered secured if the issuer enters into respective bail or guarantee agreements for repayment of the principal amount of debt / repayment of the principal amount and payment of income from bonds. Bonds may be interest-bearing, targeted or discounted.

Public placement of bonds is carried out by offering them a pre-determined number of persons on the basis of publication in the official printed edition of the National Commission on Securities and Stock Market bonds issue bonds. Such placement is carried out by the issuer independently on the stock exchange or through the underwriter.

Private placement of bonds is carried out by direct written offer of such bonds to a predetermined number of persons whose number does not exceed 100.

Bond turnover is allowed after the National Securities and Stock Market Commission reports on the results of the placement of bonds and the issuance of a bond issue registration certificate.

Bonds of enterprises and MFIs

Bonds of enterprises are placed by legal entities only after full payment of its authorized capital. The placement of bonds for formation and replenishment of the authorized capital of the issuer, as well as coverage of losses from economic activities by admitting income from the sale of bonds as a result of current economic activity, is not allowed.

The placement and sale of bonds shall be in national currency, and if it is provided for by the legislation and prospectus of the issue of the relevant issue of bonds, – in foreign currency, taking into account the legislation on currency regulation.

The issuer of bonds of enterprises has the right to place interest and / or discount bonds at the amount that, taking into account the amount of issuance of unsecured bonds of the same issuer, whose registration has not been canceled at the date of the decision to place bonds, does not exceed three times the amount of equity or the amount of collateral provided to this end, by third parties in the event of placement of secured interest and / or discount bonds.

The total nominal amount of the issue of targeted bonds, the fulfillment of which is provided for housing construction objects, to finance the construction of which attracts funds from individuals and legal entities through the placement of bonds, can not exceed the cost of construction of the object, which provides for the fulfillment of obligations for targeted bonds, according to the approved project documentation.

The decision on the placement of bonds of enterprises is taken by the management body of the issuer whose powers are confirmed by the constituent documents of the issuer.

The decision on placement of bonds of international financial organizations is made by the authorized body (authorized person) of the international financial organization.

More information about registration of bonds of enterprises and MFIs can be found at the link.

Bonds of local loans

The issuer of bonds of local loans may be the Verkhovna Rada of the Autonomous Republic of Crimea or city council, which on its behalf places bonds and assumes obligations to their owners.

The aggregate amount of borrowings to the local budget by issuing bonds of local loans can not exceed the amount of budget deficit of the special fund of the local budget for the relevant year.

Funds from the placement of bonds received by the issuer are used to finance the budget of the budget of the Rada and are used to create, increase or update strategic objects of long-term use or objects that ensure the fulfillment of the tasks of the Councils, aimed at satisfying the interests of the population of the Autonomous Republic of Crimea and territorial communities of cities.

Expenditures on maintenance of local debt are carried out at the expense of the general fund of the local budget. Local budget expenditures for local debt servicing can not exceed 10 percent of the local budget general fund expenditures during any budget period when local debt servicing is planned.

More information on registering the issue of domestic bond bonds can be found at the link.

Mortgage bonds

Mortgage bonds are bonds that fulfill the obligations of the issuer for which mortgage coverage is provided. The mortgage bond certifies the transfer of cash from its owner and confirms the issuer’s obligation to reimburse him the nominal value of this bond and cash income in accordance with the procedure established by the Law “On Mortgage Bonds” and the prospectus, and in case of non-fulfillment by the issuer of obligations under the mortgage bond, the owner has the right to satisfy his claim at the expense of mortgage coverage.

The following types of mortgage bonds may be issued:

1) ordinary mortgage bonds;

2) structured mortgage bonds.

The issuer of ordinary mortgage bonds is a mortgage lender who is responsible for fulfilling obligations for such and mortgage bonds and all other property that may be levied in accordance with the law. The issuer of structured mortgage bonds is a specialized mortgage institution, which is responsible for executing obligations under such mortgage bonds only with mortgage coverage.

More information on registration of issue of mortgage bonds can be found at the link.

Optional certificates

Optional certificate – standard document (security) certifying the right of its owner to purchase an option certificate from the issuer (option certificate for purchase) or for sale to the issuer of the option certificate (option certificate for sale) of the underlying asset in the period and on terms specified in the prospectus emission of these option certificates.

The issuer may set the term (term) of execution of option certificates:

• during the term of the transaction – the option certificate can be executed at any time before the established deadline for its execution;
• in the established term of execution – the option certificate is executed for a specific date specified in the prospectus of the issue of the option certificate.

The term of fulfillment of obligations under option certificates can not exceed six months.

In the case of emission of option certificates with delivery, the underlying asset of which is the construction object, the issuer must be the owner or user of the land plot.

Placement and circulation of option certificates are carried out on stock exchanges.

More detailed information on registration of issue of option certificates can be found at the link.

Certificates FON

The issuer of certificates of certificates of the Fund of Real Estate Funds (VON) may be a bank or a non-bank financial institution. Registration of the issuance of certificates of the VLF and the prospectus for their issue can be carried out subject to the following requirements:

• the total nominal value of certificates issued by the issuer, may not exceed ten times the size of the issuer’s equity;
• the volume of the issue of FON certificates must be in the amount equivalent to not less than 100 thousand euros at the rate of the National Bank of Ukraine on the day of the decision to issue the certificates of the background;
• Payment for certificates of the VLAN at their placing is carried out exclusively in cash.

The issuer may decide to place the certificates of the FON after obtaining a permit from the appropriate authorized body, whose competence includes the supervision and regulation of the issuer’s activities, for the right to issue certificates of the FUND in the manner prescribed by it.

The number of issuance of certificates of the one-time issuer’s FON certificates is not limited.

For more information on registering the issuance of certificates of background information, please refer to the link.

The placement and / or circulation of securities of Ukrainian issuers outside Ukraine is made solely on the basis of the Commission’s permission. The permission is issued with the simultaneous observance of the following conditions:

• registration of securities issue;
• assumption of the same type of securities of the respective issuer to the stock trading at one of the Ukrainian stock exchanges.
• if the permit relates to the issuance of shares, then the number of shares for which placement and circulation outside Ukraine is planned to take place must not exceed 75% of the total number of shares of the respective issue.

The permission for the circulation of securities of Ukrainian issuers outside Ukraine is issued only in respect of the number of securities held on the account of the securities of their owner.

Alienation of securities (except for discount bonds) outside Ukraine on the basis of the permission for placement and circulation of securities of a Ukrainian issuer outside Ukraine is carried out at a price not lower than their nominal value.

The joint stock company makes placement of each share with the increase of the authorized capital at a price not lower than its market value, determined in accordance with the legislation of Ukraine, and does not have the right to place shares at a price lower than their nominal value.

To obtain a permit for the placement and circulation of securities of Ukrainian issuers outside Ukraine, the issuer submits to the Commission the following documents:

• application for issuance of a permit, signed by the head and certified by the issuer’s seal;
• a copy of the temporary certificate of registration of issue of respective securities, certified by the signature of the head and seal of the issuer;
• a certificate of admission to trading on the Ukrainian stock exchange of securities of the issuer of the same type as securities, for obtaining a permit for placement and circulation of which is filed an application, certified by the signatures of managers and seals of the issuer and the stock exchange;
• a certificate of deposit of a temporary global certificate, certified by the signature of the head and seal of the depositary.

Composition, procedure and timing of the regular (quarterly, annual) disclosure on the stock market, special information, information on mortgage securities, certificates of the real estate fund, information in the notice on holding general meetings by issuers of securities and submission to the Commission, information that contained in the securities prospectus and the report on the results of placement are regulated by the Disclosure Statement by the securities issuers.

Securities issuers in cases stipulated by this Regulation are required to disclose information on the stock market by:

• placing in the public information database of the National Securities and Stock Market Commission on the securities market at www.stockmarket.gov.ua (publicly accessible information database of the Commission);
• publication in one of the official printed editions of the Verkhovna Rada of Ukraine, the Cabinet of Ministers of Ukraine or the Commission (hereinafter referred to as the official printed editions);
• placing on your own web site;
• submission to the Commission.

In the event that the issuer discloses in an untimely manner the information the disclosure of which is mandatory, the issuer must notify the Commission in writing with a letter explaining the reasons that led to the untimely disclosure of the information made arbitrarily and certified by the head of the issuer.

The issuer informs shareholders or investors of late disclosure by publishing information and corresponding notice in the public information database of the Commission within two days, but not later than 10.00 on the third day after the day when the issuer discloses the fact of untimely disclosure.

If the issuer discloses inaccurate information, then it is obliged to take measures to refute such Information and to disclose the corrected Information in the same way (methods), which (s) such false information was disclosed.

More information about disclosure by issuers can be found at the link.