The Cabinet of Ministers proposed to introduce new types of securities into circulation

The Government of the Russian Federation proposes to put into circulation “multi-voting” shares, as well as shares convertible into voting ones, subject to the occurrence of a specified event. The initiative was announced at a meeting of President Vladimir Putin with the Cabinet of Ministers by First Deputy Prime Minister Andrei Belousov.

“It is proposed to introduce a special type of securities – the so-called “polyvoiced” shares. These securities are shares, the owner of which is granted the right to several votes at a shareholders’ meeting. This will allow issuers to raise more funds while maintaining control over the companies,” Belousov said.

He also recalled that such shares are already being issued in special administrative regions (SAR). Residents of such zones (NAO only) were allowed to issue “multi-voiced” shares in the summer of 2022. The Cabinet of Ministers is now discussing the issue of expanding the norm with the Central Bank, Mr. Belousov added.

Another new financial instrument, a new type of convertible securities, is designed to provide additional protection to investors.

“It is proposed to introduce a new type of convertible securities into circulation. Such an instrument would give the issuer the right to issue preference shares convertible into voting shares subject to the occurrence of a specified event. For example, in case of non-payment of income on them,” the First Deputy Prime Minister said.

It is clarified that the conversion of such securities (in the event of a specified event) will occur regardless of the additional decision of the issuer.

Grigory Leiba