Emission valuable papers- this is the sequence of actions of the issuer (for example, a business company) to place securities, that is, distribute them among a certain category of persons.
The legal entity that issues securities in the form of shares or bonds is called the issuer. In accordance with current Russian legislation, issue-grade securities are shares and bonds.
A share is a security that secures the shareholder’s rights to receive dividends in proportion to his share in the authorized capital of the joint-stock company and to participate in the management of the company. Shares can be ordinary - giving both the right to dividends and the right to vote at the general meeting of shareholders, and preferred, for which, after the issue of shares, you can receive dividends and have certain advantages over holders of ordinary shares, but they usually do not give the right to participate in management.
A bond is a security that entitles its owner to receive back its value and a specified percentage of that value. The issue of bonds is aimed solely at attracting capital; bonds can be issued either with a lump sum repayment or in stages.
The grounds for issuing securities are:
- issue of securities upon establishment of a legal entity;
- issuance of securities during the reorganization of a legal entity in the form of merger, accession, separation, division or transformation;
- additional issue of securities;
- issue of bonds – debt securities.
Depending on the type or grounds of the issue, the order, procedure, and list of documents submitted to the registration authority differ.
The main purpose of issuing securities is to attract the amount necessary for the joint-stock company for its functioning. Money. The issue of securities can be primary and additional: the issue of shares is mandatory when establishing a joint stock company; subsequently, shares or bonds can be issued on a voluntary basis, for example, to increase the authorized capital, attract additional financial resources or redistribute participation in the authorized capital upon reorganization of a legal entity.
The issue of securities can be carried out in the following forms - registered securities and bearer securities.
Before issuing securities, it is necessary to evaluate investment attractiveness of these securities, the purposes and volumes of the issue, determine the form, volume and denomination of the securities to be issued.
The issue of securities must be carried out in strict accordance with current legislation, otherwise the issuer may have serious problems with government agencies. The procedure for issuing securities consists of five stages.
- Making a decision to issue securities.
- Documentary confirmation of the decision.
- State registration of securities issue.
- Placement of securities.
- State registration of a report on the results of the issue of securities.
This procedure is strictly regulated by the provisions of the Federal Law “On the Securities Market”. Registration of the issue of securities upon establishment of a legal entity must be carried out within a month after its state registration as a legal entity. Without state registration of the issue of securities, including registration of an additional issue of securities, the placement of securities is not permitted.
The results of the issue of securities, except for cases expressly provided by law, must be published in the press. Unplaced securities remain at the disposal of the executive body of the business company and can become a reserve for additional issue of securities.
The release of securities into circulation is called an issue or initial placement. Securities are issued in the following cases:
1) when creating a joint stock company (shares);
2) when increasing the size of the authorized capital (shares);
3) when attracting borrowed capital (bonds).
The issue of securities can be carried out in two forms:
1. By partial placement, i.e. by closed subscription among a limited number of investors
2. By public placement among an unlimited number of investors
The circulation of securities occurs on the securities market, i.e. circulation is an economic relationship involving a change in the ownership of securities. There are the following types of securities markets:
1) primary, on which the initial placement of securities (issue) takes place. This could be in a commercial bank, in government agencies, enterprises, joint-stock companies.
2) secondary, on which the secondary placement of securities is carried out, i.e. appeal. The secondary market can be:
a) stock exchange – this is the activity of a stock exchange;
b) over-the-counter – these are transactions with securities outside the stock exchange ( commercial banks, joint stock companies, investment companies).
Primary market is the economic space that a security travels from its issuer to its first buyer.
In the primary market, any person with the necessary status can obtain borrowed capital by issuing bonds. When issuing shares, a prospectus (declaration) must be published, which contains reliable and complete information about the nature of the JSC’s activities, the number of shares, their types, and how many will be sold. In Russia, large commercial banks play a major role in the primary market.
The release of securities on the primary market requires the following requirements:
1) the issuer must ensure that there is demand for securities, they must be liquid, consultations with stock market professionals are necessary
2) there must be a guarantor who, together with the issuer, will share responsibility for the issue.
3) the issuer must register the entire issue of securities with the relevant government agency, pay the issue tax and publish the necessary information about the issue.
The price of shares on the primary market can be determined by the issuer himself, also taking into account supply and demand.
Currently, the following securities exist on the primary market:
1) securities offered by CB
2) securities of other joint-stock companies
3) securities from the state.
Secondary securities market- this is the sphere of circulation of securities, where they end up after the first owner sells them.
The secondary market may be:
1) unorganized or over the counter
2) organized or stock exchange
in many countries, the bulk of securities - 85% - are sold on the over-the-counter market, and on the exchange market - 15%, however, it is the exchange market, where higher-quality, most important securities are concentrated, that determines the situation and the process of development of the financial market.
OTC market has the following features:
1) many sellers of securities (CBs, investment funds, insurance companies, brokerage firms, enterprises);
2) there is no uniform exchange rate for identical securities;
3) trading of securities is carried out simultaneously at different points (on the street, in offices);
4) there is no single center organizing this trade;
5) there is no accurate information about prices from different sellers in different cities.
In Russia, investment funds and commercial banks are currently operating on the over-the-counter market.
OTC Markets may be in the following forms:
1) simple auction markets
2) continuous auction markets
3) dealer markets
Key characteristics of the secondary market:
1) depth is determined by the volume of supply or demand
2) width at each specific price level
3) level of resistance
Resistance characterizes the price range within which market participants are willing to buy or sell securities. The wider the range, the more likely it is that the market will be liquid. The more people want to buy or sell a security at a specific price, the larger the volume of their orders, the wider and deeper the secondary market.
Participants in the secondary securities market, The stock market can be subdivided:
1) by the nature of economic behavior
a) state;
b) population;
c) commercial organizations - divided into financial(CBs, investment banks, insurance funds, investment funds, pension funds) and non-financial JSC
2) by level of professionalism– there are professional institutions, licensed and non-professional
3) by type of securities activity
4) in relation to the citizenship of a particular country
Questions for self-control
1. Define a security.
2. In what form can securities exist?
3. List the properties of securities.
4. What degrees of reliability of securities exist?
5. What types of securities are in circulation in the Russian Federation?
6. What are derivatives?
7. Describe corporate securities.
8. What is the difference between a stock and a bond?
9. What determines the stock price?
10. Name the types of government securities.
11. Describe the bill.
12. What is the difference between a promissory note and a bill of exchange?
13. What are the functions of a bill of exchange?
14. Name the participants in the securities market.
15. Who can be an issuer of securities?
16. Name the composition of investors.
17. How is the issue and placement of securities carried out?
18. Describe the primary and secondary securities markets.
Page 1 of 2
,
1. The concept of issue-grade securities, the issue procedure
In accordance with Art. 1 Federal Law dated April 22, 1996 No. 39-FZ “On the Securities Market” issue-grade security - any security, including uncertificated paper, which is simultaneously characterized by the following features:
- consolidates a set of property and non-property rights that are subject to certification, assignment and unconditional implementation in compliance with the form and procedure established by Federal Law;
- posted in releases;
- has equal volume and terms of exercise of rights within one issue, regardless of the time of acquisition of the security;
- consolidate a set of property and non-property rights that are subject to satisfaction, assignment and unconditional implementation in compliance with the form and procedure established by the current legislation.
The form and procedure for certification, assignment and exercise of rights secured by issue-grade securities are determined by the Federal Law of the Russian Federation “On the Securities Market” and are indicated in the decision on the issue of securities.
Issue-grade securities may be issued in one of the following forms:
- registered securities in a documentary form of issue (registered documentary securities);
- registered uncertificated securities of issue (registered uncertificated securities);
- bearer securities in a documentary form of issue (documentary bearer securities).
The Federal Law “On the Securities Market” provides that in the documentary form of issue-grade securities, the certificate and the decision to issue securities are documents certifying the rights secured by the security. This formulation is incorrect, since the rights of holders must be certified by the securities themselves, and not by securities derived from them - certificates. In addition, it follows from this provision that each security must be accompanied by a decision on its issue. This is unrealistic, and, in our opinion, it is necessary to amend the law to clarify that the documents certifying the rights secured by a security are the corresponding securities containing all the details.
In the non-documentary form of issue-grade securities, the decision to issue securities is a document certifying the rights secured by the security.
The form of securities chosen by the issuer must be clearly defined in its constituent documents and (or) the decision on the issue of securities and the prospectus for the issue of securities.
Failure by the issuer to comply with these requirements is grounds for refusal to register the issue of securities/
When issuing issue-grade securities in documentary form, their owner may be issued one certificate for all securities purchased by him, containing indications of their total quantity, category and nominal value.
A security certificate is a document issued by the issuer and certifying the set of rights to the number of securities specified in it.
The certificate of an issue-grade security must contain the following mandatory details:
- type of securities;
- state registration number of issue-grade securities;
- the issuer’s obligation to ensure the owner’s rights if the owner complies with legal requirements Russian Federation;
- indication of the number of issue-grade securities certified by this certificate;
- indication of the total number of issued securities with this state registration number;
- an indication of whether the issue-grade securities were issued in documentary form with mandatory centralized storage or in documentary form without mandatory centralized storage;
- an indication of whether the issue-grade securities are registered or bearer;
- issuer's seal;
- signatures of the issuer’s managers and the signature of the person who issued the certificate;
- other details provided for by the legislation of the Russian Federation for a specific type of securities.
A mandatory requisite for a certificate of a registered issue-grade security is the name (name) of its owner.
The owner or nominee holder of registered securities issued in documentary form may refuse to receive a certificate.
The fact of issuance or refusal to obtain a certificate must be reflected in the registry system.
One certificate can certify the right to one, several or all issue-grade securities with one state registration number. The total number of issue-grade securities recorded in all certificates issued by the issuer must not exceed the number of securities recorded in the decision on the issue of issue-grade securities.
The issuer, when making a decision on the issue of issue-grade securities in documentary form, may determine that certificates of securities issued by it can be issued to the owners (without mandatory centralized storage) or are subject to mandatory storage in depositories and cannot be issued to all owners (with mandatory centralized storage).
The introduction of mandatory centralized storage of securities for shares of joint-stock companies issued in documentary and uncertificated form is not permitted.
For a documentary form of issue of issue-grade securities without mandatory centralized storage, the issuer may also decide to introduce mandatory centralized storage only if all the securities of the issue were deposited with clients in the depository by the time the decision was made.
Certificates of issue-grade securities without mandatory centralized storage may be transferred for storage to a depository on the basis of a depository agreement.
Issue-grade bearer securities can only be issued in documentary form. Registered issue-grade securities can be issued in both documentary and non-documentary form. The form of issue-grade securities is determined by the issuer. Issue-grade securities with one state registration number are issued in one form. The form of issue-grade securities can be changed by decision of the management body of the issuer that made the decision on the issue, only with the consent of all owners of the securities of this issue and after registration of such a decision with the authorized state body.
Securities issued by foreign issuers are admitted to circulation or initial placement on the securities market of the Russian Federation after registration of the prospectus for the issue of these securities with the Federal Securities Market Commission.
Securities issued by issuers registered in the Russian Federation are allowed for circulation outside the Russian Federation by decision of the Federal Commission for the Securities Market.
Issue-grade securities, the issue of which has not been registered in accordance with the requirements of the Federal Law, are not subject to placement.
The procedure for issuing securities is the sequence of actions of the issuer to place issue-grade securities, established by the Federal Law of the Russian Federation “On the Securities Market” and regulations of the Federal Commission on the Securities Market.
In accordance with Art. 19 Federal Law “On the Securities Market”, the procedure for issuing securities, unless otherwise provided by the legislation of the Russian Federation, includes the following stages:
- adoption by the issuer of a decision on the issue of issue-grade securities;
- registration of the issue of issue-grade securities;
- for the documentary form of issue - production of securities certificates;
- placement of issue-grade securities;
- registration of a report on the results of the issue of equity securities.
When issuing securities, registration of the issue prospectus is carried out when placing issue-grade securities among an unlimited circle of owners or a pre-known circle of owners, the number of which exceeds 500, as well as in the case when the total volume of the issue exceeds 50 thousand minimum wages.
When registering a prospectus for the issue of securities, the issue procedure is supplemented with the following steps:
- preparation of a prospectus for the issue of issue-grade securities;
- registration of the prospectus for the issue of issue-grade securities;
- disclosure of all information contained in the prospectus;
- disclosure of all information contained in the report on the results of the issue.
It is prohibited to issue securities derivatives in relation to issue-grade securities, the results of the issue of which have not been registered.
Let's consider each of the stages of issuing securities.
The decision to issue securities must contain:
- full name of the issuer and its legal address;
- date of the decision to issue securities;
- name of the authorized body of the issuer that made the decision on the issue;
- type of issue-grade securities;
- state registration mark and state registration number of securities;
- owner’s rights secured by one security;
- procedure for placement of issue-grade securities;
- the issuer’s obligation to ensure the rights of the owner, subject to the owner’s compliance with the procedure for exercising these rights established by the legislation of the Russian Federation;
- indication of the number of issue-grade securities in this issue;
- indication of the total number of issued securities with this state registration number and their nominal value;
- indication of the form of securities (documentary or non-documentary, registered or bearer);
- seal of the issuer and signature of the head of the issuer;
- other details provided for by the legislation of the Russian Federation for a specific type of equity securities.
In the case of a documentary form of issue-grade securities, the issuer must additionally provide a description (sample) of the certificate.
The decision on each issue of issue-grade securities must be registered separately.
The issuer does not have the right to change the registered decision on the issue of securities in terms of the scope of rights for one issue-grade security established by this decision.
The decision to issue securities is drawn up in two or three copies, certified by the registration authority. One copy is kept by the registration authority, the second by the issuer, and the third is deposited with the registrar (if there is one). In case of discrepancies in the text between copies of the decision, the text of the document stored in the registration authority is considered true.
Owners of securities have the right to familiarize themselves with decisions on the issue of securities kept by the issuer and registrar.
Federal law prohibits restricting security holders' access to the originals of a registered decision.
An issue-grade security secures property rights to the extent that they are established in the decision on the issue of these securities and in accordance with the legislation of the Russian Federation.
In case of discrepancies between the text of the decision on the issue of securities and the data given in the certificate of the issue security, the owner has the right to demand the exercise of the rights secured by this security to the extent established by the certificate. The issuer is responsible for discrepancies between the data contained in the certificate of an issue-grade security and the data contained in the decision on the issue of securities, in accordance with the legislation of the Russian Federation.
The second stage is registration of the issue of issue-grade securities.
Registration of the issue of securities is carried out by registration authorities, the list of which on the territory of the Russian Federation is established by the Federal Commission for the Securities Market. Depending on the issuer and the total volume of the nominal value of securities of one issue, registration is carried out by the Ministry of Finance of the Russian Federation, the Central Bank of the Russian Federation, the Federal Commission for the Securities Market and its regional branches.
To register the issue of issue-grade securities, the issuer is required to submit the following documents:
- application for registration;
- decision on the issue of issue-grade securities;
- prospectus (if registration of the issue of securities is accompanied by registration of the prospectus);
- copies of constituent documents (when issuing shares to create a joint-stock company);
- documents confirming the permission of the authorized executive body to issue securities (in cases where the need for such permission is established by the legislation of the Russian Federation).
The issuer and officials of the issuer's management bodies, who are charged by the charter and (or) internal documents of the issuer with the responsibility for the completeness and accuracy of the information contained in these documents, are responsible for fulfillment of these obligations in accordance with the legislation of the Russian Federation.
When registering an issue of equity securities, this issue is assigned a state registration number. The procedure for assigning a state registration number is established by the registration authority.
The registration authority is obliged to register the issue of equity securities or make a reasoned decision to refuse registration no later than 30 days from the date of receipt of the documents submitted for registration.
The registration authority has the right to refuse registration of an issue of issue-grade securities. The list of grounds for such a refusal is provided in Art. 21 Federal Law “On the Securities Market” and is exhaustive.
The grounds for refusal to register an issue of issue-grade securities are:
- violation by the issuer of the requirements of the legislation of the Russian Federation on securities, including the presence in the submitted documents of information allowing to draw a conclusion that the conditions for the issue and circulation of issue-grade securities are inconsistent with the legislation of the Russian Federation and the non-compliance of the conditions for the issue of issue-grade securities with the legislation of the Russian Federation on securities;
- non-compliance of the submitted documents and the information contained therein with the requirements of the Federal Law “On the Securities Market”;
- entering into the prospectus or decision on the issue of securities (in other documents that are the basis for registering the issue of securities) false information or information that does not correspond to reality (inaccurate information).
The decision to refuse to register an issue of issue-grade securities and the issue prospectus may be appealed to the court if the registration is carried out upon the establishment of a joint-stock company and the founders are individuals, to the arbitration court - if the founders are legal entities or an additional issue of securities is carried out.
After registering the issue of securities, the next stage of the issue procedure is their placement on the securities market.
The number of issued issue-grade securities must not exceed the quantity specified in the constituent documents and prospectuses on the issue of securities.
The issuer may place a smaller number of issue-grade securities than indicated in the prospectus. The actual number of placed securities is indicated in the report on the results of the issue submitted for registration.
At any stage of the issue before the date of registration of the report on the results of the issue of securities, the Federal Securities Market Commission or another registering body may recognize the issue as invalid if the following circumstances exist:
- violation by the issuer of the requirements of the legislation of the Russian Federation during the issue of securities (including failure by the issuer to disclose information in accordance with the requirements of federal laws and legal acts of the Russian Federation, regulations of the Federal Commission; implementation of unfair advertising of securities, violation of the terms of placement of securities established in decision on the issue and (or) prospectus; invalidation in court of decisions of the authorized bodies of the issuer on the placement or issue of securities; absence of a registrar for an issuer with more than 500 owners of registered securities; other violations);
The share of unplaced securities from the number specified in the issue prospectus, at which the issue is considered failed, is established by the Federal Securities Market Commission.
The consequence of declaring the issue invalid is the return to investors of their funds spent on the purchase of securities in the manner established by the Federal Commission for the Securities Market.
The issuer is obliged to complete the placement of issued issue-grade securities after one year from the start date of the issue, unless other terms for the placement of issue-grade securities are established by the legislation of the Russian Federation. It should be noted that the current legislation does not determine what is considered the start date of the issue. In our opinion, such a date should be considered the date the issuer made a decision to issue equity securities, since the adoption of such a decision is the first stage of the issue.
It is prohibited to place securities of a new issue earlier than two weeks after providing all potential owners, that is, persons who can purchase securities, with the opportunity to access information about the issue, which must be disclosed in accordance with the requirements of the Federal Law “On the Securities Market” and resolutions of the Federal Commission for the Securities Market. Information on the placement price of securities may be disclosed on the day the placement of securities begins.
The procedure for disclosing information - ensuring its availability to all interested parties, regardless of the purpose of obtaining this information according to a procedure that guarantees its location and receipt, is determined by Chapter 7 of the Federal Law “On the Securities Market”, the Regulations on the Information Disclosure System on the Securities Market, approved by the Resolution of the Federal Securities Market Commission dated January 9, 1997 No. 2, Regulations on the procedure and scope of information disclosure by open joint-stock companies when placing shares and securities convertible into shares by subscription, approved by the Resolution of the Federal Securities Market Commission dated April 20, 1998 No. 9, Regulations of the Central Bank of July 2, 1998 No. 43-P “On the disclosure of information by the Bank of Russia and credit institutions - participants in financial markets.”
An issuer that publicly places issue-grade securities is obliged to disclose information about its securities and its financial and economic activities in the following forms:
1. Preparation of a quarterly securities report. The quarterly report must be accepted by the authorized body of the issuer, submitted to the Federal Securities Market Commission or a state body authorized by it in the form of a brochure, which is provided to all securities holders upon their request, for a fee not exceeding the cost of its production9. The issuer's quarterly report must contain the following data:
- codes assigned by the registration authority to messages about material facts disclosed in the reporting quarter affecting the financial, economic and other activities of the issuer;
- data on the financial and economic activities of the issuer: balance sheet, profit and loss accounts at the end of the reporting quarter;
- facts that resulted in an increase in the issuer’s net profit or losses by more than 20 percent during the reporting quarter compared to the previous quarter;
- data on the formation and use of the issuer’s reserve and other special funds.
A quarterly report is compiled based on the results of each completed quarter no later than 30 calendar days after its end. The quarterly report must be approved by the issuer's authorized body.
2. Report on significant events and actions affecting the financial and economic activities of the issuer. Published by the issuer no later than 5 days from the date of events or actions in print media distributed in a circulation accessible to the majority of holders of the issuer's securities.
Messages about material facts affecting the financial and economic activities of the issuer are the following information:
- on changes in the list of persons included in the issuer’s management bodies (with the exception of the general meeting of participants in limited liability companies and the general meeting of shareholders in joint-stock companies);
- on changes in the amount of participation of persons included in the issuer’s management bodies in the authorized capital of the issuer, as well as its subsidiaries and affiliates, and on the participation of these persons in the capital of other legal entities, if they own more than 20 percent of the specified capital;
- on changes in the list of owners (shareholders) of the issuer who own 20 percent or more of the issuer’s authorized capital;
- on changes in the list of legal entities in which the issuer owns 20 percent or more of the authorized capital
- on the reorganization of the issuer, its subsidiaries and dependent companies;
- on accrued and (or) paid income on the issuer’s securities;
- on redemption of securities;
- on issues of securities suspended or declared invalid;
- on the appearance in the issuer’s register of a person owning more than 25 percent of its issue-grade securities of any particular type.
During a public placement or circulation of an issue of issue-grade securities, it is prohibited to provide an advantage to one potential owner over another in the acquisition of securities. This provision does not apply in the following cases:
1) when issuing government securities;
2) when granting shareholders of joint stock companies the pre-emptive right to purchase a new issue of securities in an amount proportional to the number of shares they own at the time the decision on the issue was made;
3) when the issuer introduces restrictions on the acquisition of securities by non-residents.
The final stage of the issue of securities is the registration of a report on the results of the issue.
No later than 30 days after the completion of the placement of issue-grade securities, the issuer is obliged to submit a report on the results of the issue of issue-grade securities to the registration authority.
The report on the results of the issue of equity securities must contain the following information:
1) the start and end dates of the placement of securities;
2) the actual placement price of securities (by type of securities within a given issue);
3) the number of placed securities;
4) the total volume of proceeds for the placed securities, including:
a) the amount of funds in rubles contributed in payment for the placed securities;
b) the amount of foreign currency contributed in payment for the placed securities, expressed in the currency of the Russian Federation at the exchange rate of the Central Bank of the Russian Federation at the time of deposit;
c) the volume of tangible and intangible assets contributed as payment for placed securities, denominated in the currency of the Russian Federation.
For shares, the report on the results of the issue of issue-grade securities additionally indicates a list of owners who own a block of issue-grade securities, the size of which is determined by the Federal Commission for the Securities Market.
The registration authority reviews the report on the results of the issue of equity securities within two weeks and, in the absence of violations related to the issue of securities, registers it. The registration authority is responsible for the completeness of the report registered by it.
As already noted, the issue procedure is supplemented by four more stages, if the issue, in accordance with current legislation, requires registration of the issue prospectus.
When registering a prospectus, the issuer first of all prepares it. In accordance with Art. 22 Federal Law “On the Securities Market” the prospectus must contain:
- information about the issuer;
- data on the financial position of the issuer (this information is not indicated in the prospectus when creating a joint stock company, with the exception of cases of transformation of legal entities of a different organizational and legal form into it);
- information about the upcoming issue of equity securities.
Issuer information includes:
a) the full and abbreviated name of the issuer or the names of the founders;
b) legal address of the issuer;
c) number and date of the certificate of state registration as a legal entity;
d) information about persons owning at least 5 percent of the issuer’s authorized capital;
e) the structure of the issuer's governing bodies, specified in its constituent documents, including a list of all members of the board of directors, board or management bodies of the issuer performing similar functions at the time of the decision to issue securities, indicating the last name, first name, patronymic, all positions of each of its members currently and over the past five years, as well as shares in the authorized capital of the issuer of those of them who are personally its participants;
f) a list of all legal entities in which the issuer owns more than 5 percent of the authorized capital;
g) a list of all branches and representative offices of the issuer, containing their full names, date and place of registration, legal addresses, surnames, first names, patronymics of their managers.
In the issue prospectus when issuing shares in the process of creating a joint-stock company, with the exception of cases of transformation into it of a legal entity of a different organizational and legal form, only information about the name of the issuer or its founders, information about the state registration certificate and the legal address of the issuer are indicated.
Data on the issuer's financial position include:
- balance sheets (for issuers that are banks, balance sheets for second-order accounts) and reports on the financial results of the issuer’s activities, including a report on the use of profits, in established forms for the last three completed financial years or for each completed financial year from the date of formation, if this period is less than three years;
- the balance sheet of the issuer (and for issuers that are banks, the balance sheet for secondary accounts) as of the end of the last quarter before the decision to issue securities;
- a report on the formation and use of the reserve fund for the last three years;
- the amount of overdue debt of the issuer to creditors and for payments to the relevant budget as of the date of the decision to issue securities;
- data on the issuer’s authorized capital (the size of the authorized capital, the number of securities and their par value, owners of securities whose share in the authorized capital exceeds the standards established by the antimonopoly legislation of the Russian Federation);
- a report on previous issues of issue-grade securities of the issuer, including the types of issued issue-grade securities, number and date of state registration, name of the registering authority, volume of issue, number of issued issue-grade securities, terms of payment of income, other rights of owners.
Information about the upcoming issue of securities must contain the following information:
- about securities (the form and type of securities, indicating the procedure for storing and recording rights to securities), about the total volume of the issue, about the number of issue-grade securities in the issue;
- on the issue of securities (the date of the decision on the issue, the name of the body that made the decision on the issue, restrictions on potential owners, the place where potential owners can purchase issue-grade securities; when storing certificates of issue-grade securities (or) recording rights to issue-grade securities securities in the depository - name and legal address of the depository);
- on the start and end dates of the placement of issue-grade securities;
- on prices and payment procedures for equity securities purchased by owners;
- about professional participants in the securities market or their associations who are expected to be involved in the placement of the securities issue at the time of registration of the issue prospectus (name, legal address, function performed during the placement of securities);
- on receipt of income on equity securities (the procedure for paying income on equity securities and the methodology for determining the amount of income);
- on the name of the body that registered the issue of issue-grade securities.
The issue prospectus prepared by the issuer must be registered with the registration authority.
The issuer is obliged to provide all interested parties with access to the information contained in the prospectus and publish a notice on the procedure for disclosing information in a periodical printed publication with a circulation of at least 50 thousand copies.
The issuer, as well as professional participants in the securities market who place issue-grade securities, are obliged to provide any potential owners with the opportunity to access the disclosed information before purchasing securities.
In cases where at least one issue of the issuer's securities was accompanied by the registration of a prospectus, the issuer is obliged to disclose information about its securities and its financial and economic activities.
A ban on the issue of securities on grounds of inexpediency is not permitted. Registration of an issue of issue-grade securities may be refused if there are grounds provided for in Article 21 of this Federal Law:
- violation by the issuer of the requirements of the legislation on securities, including the presence in the submitted documents of information that allows one to draw a conclusion that the conditions for the issue and circulation of issue-grade securities are inconsistent with the legislation of the Russian Federation and the non-compliance of the conditions for the issue of issue-grade securities with the legislation of the Russian Federation on securities;
- discrepancy between the submitted documents and the information contained therein with the requirements of the Federal Law “On the Securities Market”;
- entering into the prospectus or decision on the issue of securities (other documents that are the basis for registering the issue of securities) false information or information that does not correspond to reality (inaccurate information).
The issue of issue-grade securities may be suspended or declared invalid. At the same time, the Federal Law “On the Securities Market” and the Resolution of the Federal Securities Commission establish different grounds for such suspension or recognition. The Federal Law “On the Securities Market” indicates that the grounds for suspending an issue and declaring it invalid are the same. The FCSM makes a distinction between these grounds. In our opinion, since the concepts of “suspension of an issue” and “recognizing an issue as failed” are different, the grounds for each of these actions by the registering authority cannot be the same.
Actions that are expressed in violation of the issuance procedure and are the basis for the registration authority to refuse to register the issue of issue-grade securities, to recognize the issue of issue-grade securities as invalid or to suspend the issue of the Federal Law “On the Securities Market” are called unfair issue.
In accordance with the Regulations on the procedure for issuing and recognizing the issue of securities as failed or invalid, approved by Resolution of the Federal Commission for the Securities Market dated 31-12.97 No. 45, the issue of securities may be suspended if the registration authority detects the following violations:
- violation by the issuer of the requirements of the legislation of the Russian Federation during the issue (including failure by the issuer to disclose information in accordance with the requirements of federal laws and legal acts of the Russian Federation, regulations of the Federal Commission;
- carrying out unfair advertising of securities;
- violation of the terms of placement of securities established in the decision on the issue and/or prospectus;
- detection of unreliable information in the documents on the basis of which the issue of securities was registered;
- presence of violations of the procedure for maintaining the register of owners of registered securities, including those resulting in the suspension or revocation of the license of the registrar maintaining the register of owners of registered securities of the relevant issuer;
- in other cases provided for by the legislation of the Russian Federation on securities.
If violations of the established issuance procedure are detected, the registration authority may also suspend the issue until the violations are eliminated within the period for placement of securities. The resumption of the issue is carried out by a special decision of the registering authority.
The issue of securities may be suspended, and the issue of securities may be declared invalid at any stage of the procedure for issuing securities before the date of registration of the report on the results of the issue of these securities.
Before a decision is made to recognize the issue of securities as invalid, in order to conduct an inspection of the issuer or protect the rights of the owners of securities, the issue of securities must be suspended, except for the cases provided for by the Regulations.
Registration bodies whose competence includes state registration of securities issues on the territory of the Russian Federation have the right to suspend the issue, recognize the issue of securities as invalid, and also cancel the issues of securities.
The Federal Commission has the right to suspend the issue and recognize the issue of securities as invalid, the state registration of the issue of which was carried out by another registration authority with notification of this registration authority.
The Federal Commission or other registration body notifies the following about the suspension of the issue of securities: the issuer; underwriter of securities whose issue is suspended; the registrar maintaining the register of owners of registered securities, the issue of which has been suspended; trade organizers.
Notification of the suspension of the issue of securities is carried out no later than the next day after the date of the decision to suspend the issue of securities by telephone, fax, or using other means of electronic communication (preliminary notification), with the obligatory sending of written confirmation no later than 3 days from date of such decision (subsequent notification).
If the suspension is carried out by another registering body, then it is obliged no later than 3 days after the date of the decision to suspend the issue of securities to send a copy of the notification to the Federal Commission.
If the Federal Commission makes a decision to suspend the issue of securities, the Federal Commission is obliged to send a copy of the notification about this to another registration authority no later than 3 days after the date of such decision.
The notice of suspension of the issue of securities must contain the following information:
- name of the body that made the decision to suspend the issue of securities;
- the date of the decision to suspend the issue of securities;
- full name of the issuer of securities, the issue of which is suspended;
- type, category (type), form of securities, state registration number of their issue, the body that carried out the state registration of the issue of securities, the issue of which is suspended;
- grounds for suspending the issue of securities;
- a ban on entering into transactions for the placement of these securities, a ban on advertising securities of this issue, a ban on the registrar accepting transfer orders in relation to transactions on the placement of securities, the issue of which has been suspended, as well as carrying out other actions, except for cases provided for by federal laws and legal acts of the Russian Federation, regulations of the Federal Commission.
The Federal Commission or other registration body, no later than 5 days from the date of the decision to suspend the issue of securities, discloses information about the fact of suspension of the issue of securities in the media by publishing a message containing all information similar to the information contained in the notification.
If a decision is made to suspend the issue of securities, the body that made such a decision, after establishing the facts of a violation, sends an order to the issuer to eliminate violations of the legislation of the Russian Federation on securities. The order must contain information similar to the information contained in the notification, as well as an indication of the necessary measures and deadlines for eliminating violations.
To clarify all the circumstances that led to the suspension of the issue of securities, the Federal Commission or other registration body has the right to conduct inspections and request the necessary documents and information from the issuer.
An issuer whose issue of securities has been suspended is obliged, within the placement period established in the decision on the issue of securities, or the period established in the order, to eliminate violations and send a report on elimination to the body that made the decision to suspend the issue, as well as to the Federal Commission detected violations.
If violations cannot be eliminated within the placement period established in the decision on the issue of securities, or within the period established in the order, the body that made the decision to suspend the issue may allow the resumption of the issue if there is an obligation on the part of the issuer to eliminate the violation after registration of the report on results of the securities issue. In this case, the issuer is obliged to submit a protocol on eliminating violations, containing the deadlines and responsibilities of the issuer to eliminate violations.
If the issuer fails to fulfill the obligation to eliminate the violations set out in the protocol, the Federal Commission or another registration body may apply to the court to declare the issue invalid.
The issue of securities may be resumed with the written permission of the Federal Commission or other registration authority only upon the results of consideration of the issuer's report on the elimination of violations that led to the suspension of the issue of securities. The specified report is considered no later than 10 days from the date of its receipt.
The Federal Commission or other registration body shall send in writing, no later than 3 days from the date of the decision, a notice of permission to resume the issue of securities to all persons who were notified of the suspension of the issue of securities.
A written notice of permission to resume the issue of securities must contain the following information:
- name of the body that made the decision to resume the issue of securities;
- the date of the decision to resume the issue of securities;
- full name of the issuer of the securities, the issue of which has been resumed;
- type, category (type), form of securities, state registration number of their issue, the body that carried out the state registration of the issue of securities, the issue of which has been resumed;
- an indication of the termination of restrictions on transactions for the placement of these securities, on advertising of securities of this issue, a ban on the registrar accepting transfer orders in relation to transactions for the placement of securities, the issue of which has been suspended, as well as taking other actions.
The body that made the decision to resume the issue of securities, no later than 5 days from the date of such decision, publishes information about the fact of the resumption of the issue of securities in the media.
An issue of securities may be declared invalid by the Federal Commission or other registering authority in the following cases:
- violation by the issuer of the requirements of the legislation of the Russian Federation during the issue of securities (including the issuer’s failure to disclose information in accordance with the requirements of federal laws and legal acts of the Russian Federation, regulations of the Federal Commission;
- carrying out unfair advertising of securities, violating the terms of placement of securities established in the decision on the issue and/or prospectus;
- invalidation in court of decisions of the authorized bodies of the issuer on the placement or issue of securities;
- the issuer with more than 500 owners of registered securities does not have a registrar; other violations);
- detection of unreliable information in the documents on the basis of which the issue of securities was registered;
- presence of violations of the procedure for maintaining the register of owners of registered securities, including those resulting in the suspension or revocation of the license of the registrar maintaining the register of owners of registered securities of the relevant issuer;
- failure by the issuer to submit to the registration authority a report on the results of the issue of securities after the expiration of the period for placement of securities;
- refusal of the registration authority to register a report on the results of the issue of securities;
- non-placement of the share provided for by the decision on the issue of securities, in case of non-placement of which their issue is recognized as failed;
- non-placement of at least one security of the issue;
- in other cases provided for by the legislation of the Russian Federation on securities.
An issue of securities may be recognized as failed by the Federal Commission or other registration authority also if the issuer, within the period specified in the order, has not eliminated the violations that were the basis for suspending the issue of securities (and which should have been eliminated within the placement period established in decision to issue securities).
If the Federal Commission makes a decision to recognize the issue of securities as invalid, it is obliged to notify another registering authority about this.
Notification of the recognition of the issue of securities as invalid by the Federal Commission is carried out the next day after such a decision is made by telephone, fax, using other means of electronic communication, with the obligatory sending of written confirmation no later than 3 days from the date of such decision.
The Federal Commission and other registration authority, if necessary in order to protect the rights of securities owners, have the right to recognize the issue of securities as invalid without applying the procedure for suspending the issue of securities.
In accordance with Art. 26 of the Federal Law “On the Securities Market” it is possible to invalidate the issue of issue-grade securities. However, the Federal Law does not define the grounds for such recognition. This gap is filled by Resolution of the Federal Commission for the Securities Market dated December 31, 1997 No. 45, according to which the issue of securities may be declared invalid by a court decision in the following cases:
- violation by the issuer of the requirements of the legislation of the Russian Federation during the issue of securities;
- detection of unreliable information in the documents on the basis of which the issue of securities was registered;
- in other cases provided for by the legislation of the Russian Federation on securities.
Contact with statement of claim The Federal Commission for the Securities Market, another registration body, the state tax service body, the prosecutor, as well as other state bodies and interested parties may declare the issue of securities invalid in cases and in the manner established by the legislation of the Russian Federation.
The issue of securities may be declared invalid at the request of the Federal Commission in the following cases:
- the issue of securities entailed a significant misrepresentation of the owners of these securities;
- the purposes of issuing securities contradict the fundamentals of law and order and morality;
- in other cases provided for by the legislation of the Russian Federation on securities.
In this case, the Federal Commission has the right to apply to the court with a demand to invalidate the issue of securities, the state registration of which was carried out by another registering authority.
Registration authorities have the right to apply to the court with a demand to invalidate the issues of securities of issuers, the state registration of issues of securities of which falls within their competence.
If a court decision to declare an issue invalid was made at the request of other persons, then upon entry into force of such a decision, the issuer of securities is obliged to notify the Federal Commission and another registration body whose powers include state registration of issues of securities of this issuer, and also send to the specified authorities a copy of the court decision.
Notification of the invalidation of an issue of securities is carried out no later than the next day after the entry into force of such a court decision by telephone, fax, using other means of electronic communication (preliminary notification), with the obligatory sending of written confirmation no later than 3 days from the date entry into force of this decision (subsequent notification).
The notice of declaring the issue of securities invalid must contain the following information:
- full name of the issuer of securities, the issue of securities of which was declared invalid;
- name of the court, date of adoption of the judicial act declaring the issue of securities invalid;
- type, category (type), form of securities, state registration number of their issue, the body that carried out the state registration of the issue of securities declared invalid;
- grounds for recognizing the issue of securities as invalid.
The issuer is obliged to publish information about this in the media no later than 5 days from the date of recognition of the issue of securities as invalid.
From the date of entry into force of a court decision declaring the issue of securities invalid, the issuer is prohibited from carrying out transactions with these securities.
The obligation to notify the registrar, underwriters, trade organizers, distributors of advertising for securities, the issue of which is declared invalid, and responsibility for their failure to notify lies with the issuer of these securities.
From the date of receipt of the preliminary notification about the invalidation of the issue of securities, the registrar has no right to accept transfer orders in relation to these securities, as well as carry out other actions, except for cases provided for by federal laws and legal acts of the Russian Federation, regulations of the Federal Commission.
If an issue of issue-grade securities is declared invalid, all securities of this issue must be returned to the issuer, and the funds received by the issuer from the placement of these securities must be returned to the owners. The Federal Commission for the Securities Market, as well as the owners of securities themselves, the issue of which has been declared invalid, have the right to go to court in order to return the funds spent on their acquisition.
All costs associated with recognizing the issue of issue-grade securities as invalid or failed and returning funds to the owners are charged to the issuer.
In the event of a violation resulting in the release of securities into circulation in quantities in excess of those announced in the prospectus, the issuer is obliged to ensure the repurchase and redemption of securities issued in excess of the quantity announced for issue.
If the issuer does not, within two months, ensure the repurchase and redemption of securities issued in excess of the number announced for issue, then the Federal Securities Market Commission has the right to go to court to recover funds received unjustifiably by the issuer. It should be noted that the current legislation does not determine for whose benefit the funds should be recovered in this case. In our opinion, funds should be recovered in favor of the owners of securities issued in excess of the number announced for issue.
When considering issues of unfair emissions, I would like to draw attention to the following. The Federal Law “On the Securities Market” for the first time enshrined the concept of dishonest issue at the legal level. At the same time, this law contains a large number of norms that refer to the regulations of the Federal Commission for the Securities Market.
The huge number of regulations of the Federal Commission for the Securities Market and gaps in the legislation have given rise to many problems, the main of which are different interpretations of the terms used, the same grounds for recognizing the issue of securities as failed and invalid, the unlimited possibility of the registering authority to arbitrarily revise the results of agreements between the issuer and acquirers and civil transactions executed by them, a different circle of persons who have the right to challenge the issue, provided for by the resolution of the Federal Securities Commission and the class of plaintiffs, provided for by law, the need for more precise regulation of the legal grounds for invalidating the issue of securities.
Emission(Latin emissio - release, from emitto - release) release of money and securities into circulation.
The issue of securities is carried out by the issuer. Issuer of securities- this is a legal entity (economic entity), a state executive body or a local government body that issues securities and private individuals who, on their own behalf, bear obligations to the owners of securities to exercise the rights secured by the securities.
The purpose of issuing securities for companies is to attract external sources of financing, therefore, each time, before organizing an issue, the issuer is faced with the task of choosing the most appropriate financial instruments for these purposes. When solving this problem, a wide range of factors are usually considered, including:
- availability of necessary financial products on the market;
- cost, terms and conditions of financing;
- collateral necessary to raise funds;
- timing of the issue;
- a possible change in control of the enterprise depending on which source of financing is chosen.
Borrowed capital on the stock market is attracted by issuing corporate bonds placed among institutional and individual investors. In this case, the issuer undertakes to regularly pay a certain percentage, and at the end of the bond circulation period - also the principal amount of the debt (bond par value). Corporate bonds are debt securities that can be traded on the exchange and over-the-counter markets. The issue of these, as well as other securities, can be carried out with the involvement of financial consultants or investment banks.
Share capital, expressing ownership of a share in the capital of a joint-stock company, is formed by issuing shares in order to mobilize long-term resources necessary for the functioning of the enterprise. The first and necessary condition for a company planning to raise funds by issuing shares is the development of a long-term development plan for the company, indicating the areas for using the capital that will be received as a result of the issue of these securities. By purchasing shares, an investor expects to receive a higher return on their investment compared to investing in debt securities (bonds).
There are two forms of subscription: open and closed subscription.
Placement of securities by open subscription (public placement, public issue)– is the placement of securities among an unlimited number of potential investors, legal entities and individuals, the composition of which is unknown in advance. In other words, in this case, securities are offered to everyone, the general public.
Placement of securities through closed subscription (private placement) is the sale of securities to a limited number of persons known in advance.
The main purpose of the prospectus is to be a source of information for potential investors. In accordance with the law, each potential acquirer must be provided with the opportunity to familiarize itself with the prospectus before purchasing securities. Analysis of information about the issuer provides an opportunity for all interested parties to independently and more reasonably assess the investment attractiveness of the issuer's securities and make a decision on their acquisition. In the case of registration of a prospectus for the issue of securities, several stages are added to the issue procedure: preparation of the prospectus, its registration, as well as disclosure of information contained in the prospectus for the issue of securities and in the report on the results of their issue.
When offering securities to the public, the issuer must not only register the prospectus, but also present to the public all the information contained in the prospectus, conduct an audit and publish a balance sheet and profit and loss information, and conduct an advertising campaign.
In case of a closed (private) placement, there is no need to make a public announcement about it, conduct an advertising campaign, register and publish a prospectus, except for the cases indicated above.
Open joint stock companies can place their shares and bonds either by open or closed subscription. Closed joint stock companies can place shares only by private subscription, and bonds – by both open and private subscription.
After making a decision on the issue, preparing a prospectus and other necessary documents, the issuer submits them to the registration authority for the state registration procedure. The registration authorities in Russia are the Federal Commission for the Securities Market and its regional branches, as well as other government bodies. For example, state registration of shares and bonds of commercial banks is carried out by the Bank of Russia.
The registration authority, if the issuer has complied with all legal requirements, registers the issue of securities. The essence of this procedure is that the obligations of the issuer are officially recorded. The issue is assigned a state registration number, which is entered into a special register. The structure of the registration number and its contents are shown in Fig. 5.1.
Rice. 5.1. Structure of the state registration number of a securities issue
For example, a registration number such as 1-07-00155 - A denotes ordinary shares of the seventh issue of an open joint-stock company, which is assigned a unique individual code - 00155.
It should be noted that the state does not verify the accuracy of the information provided by the issuer, but only certifies that the issuer’s documents and the issue prospectus contain all the necessary information. Responsibility for unreliable information lies with the issuer and the management of the issuing company. However, if the fact of unreliability of information or its distortion is revealed, the registration authority may recognize the issue as dishonest and cancel it. In this case, the issuer, at its own expense, must return all the money to investors and redeem (cancel) the issued securities.
If registration of an emission prospectus is necessary, the registration authority carries out this procedure simultaneously with the state registration of the issue itself, but formally these are two separate registrations. If the issuer subsequently changes the contents of the prospectus, each such change also undergoes a registration procedure.
After state registration of the issue, the issuer receives the right to place securities. True, this is preceded by the following actions of the issuer. If a prospectus has been registered, the issuer is obliged to disclose all information contained in the prospectus to everyone, regardless of the purpose for obtaining such information. You can begin posting papers no earlier than two weeks after the information is disclosed. This was done so that a potential investor, having all the necessary information, could make an informed decision on purchasing securities, because their purchase is always associated with risk. The issuer can only disclose information about the placement price not in advance, but on the day the placement begins.
Securities can be issued in documentary and non-documentary form. In case of a documentary form of issue, the issuer must prepare forms of securities. Only certain companies, the number of which is not very large, which have permission (license) to do so, have the right to print or import forms of securities from abroad. The forms themselves must have a sufficient number of security levels to prevent them from being falsified.
So, the issue is registered, the information is disclosed, the certificates are printed. You can place securities. For the issuer, this stage is very important - after all, it is when the securities are sold that the money from such a sale goes to the issuer’s account. It is not always easy to sell securities (as well as any other product). The issuer can resort to the services of professionals - underwriting of securities, paying for these services.
The placement of securities is carried out at the issue price. Issue price may change during the initial placement of securities depending on the market situation, but the procedure for determining the issue price is necessarily fixed in the prospectus. The issue price of shares cannot be lower than the par value (otherwise the joint stock company will not be able to form its authorized capital), but may be higher than the par value. The difference between the issue price and the nominal price of a share is called share premium and constitutes the company's additional capital.
Bonds can be placed at any price: at par, below or above par. Discount bonds are placed at a price below par, that is, at a discount, at a discount. The amount of the discount will be the investor's income in this case. Interest-bearing bonds, depending on the level of the market interest rate and the coupon yield of the bond, can be placed at a price either lower or higher than the par value. Thus, if the coupon rate is lower than the market return rate, investors will buy such a bond only on the condition that such an investment will bring them income on market conditions, that is, it will provide a return not lower than the market one. And this will become possible only when the sale price of such a bond is below par. If the coupon rate is higher than the market interest rate, such a bond can be sold above its face value, that is, at a premium.
The process of placing securities should last no more than 1 year from the start date of the issue (although, of course, the issuer can place its securities faster), after which the issuer submits a report on the issue of securities to the state registration authority. If the securities do not find demand from investors, the issuer has the right to place a smaller number of securities than were registered. But if the securities are in high demand, the issuer still cannot place more of them than were registered. Only after registration of the report can the issue of securities be considered completed, however, in the case of an issue with registration of a prospectus, the issuer must also disclose all the information contained in the report on the results of the issue of securities.
By the way, this does not limit the issuer’s obligations to disclose information about itself. The legislation establishes a rule according to which an issuer, at least one issue of whose securities (shares, bonds) was accompanied by the registration of a prospectus, is obliged to disclose information about itself in the form of a quarterly report and in the form of publication of messages about significant facts in the issuer’s activities.
Thus, the procedure for issuing equity securities includes the following stages:
- The issuer's decision to place securities;
- The issuer's decision to issue securities
- Preparation of an emission prospectus (in case the state registration of the issue of securities must be accompanied by the registration of their emission prospectus)
- State registration of the issue of securities and, if necessary, registration of the prospectus for the issue of securities
- Production of securities certificates (in case of issue of securities in documentary form) and disclosure of information contained in the securities prospectus (if state registration is accompanied by registration of the securities prospectus)
- Placement of securities
- Registration of a report on the results of the issue of securities
- Disclosure of information contained in the report on the results of the issue of securities in the event that state registration was accompanied by registration of a prospectus for the issue of securities.
Brief conclusions
1. The issue of securities means their release into circulation.
2. Issuers of securities can be legal entities (enterprises, banks) and government and administrative bodies, municipalities, which issue securities on their own behalf and bear obligations on them to the owners of the securities. Some types of securities can also be issued by individuals (for example, bills).
3. The issue of securities is carried out when establishing joint-stock companies, as well as when it is necessary to increase the authorized capital or the need to attract additional financial resources.
4. Executive authorities usually use the issue of securities to cover budget deficits or to solve other significant problems.
5. The sale of securities to their first owners forms the primary securities market.
6. When designing securities and other financial instruments, the issuer sets a goal so that they are mutually beneficial to both the issuer and the investor.
7. The issue of securities is regulated by the legislation of the Russian Federation and consists of several stages
8. The placement of securities can be carried out by open and closed subscription.
9. The issuer may organize the issue and placement of securities independently or engage professional intermediaries - underwriters - for these purposes.
10. An underwriter is a person who undertakes the obligation to organize the issue and place the issuer’s securities
Credit organizations may issue securities. An issue is a sequence of actions by the issuer established by law to place issue-grade securities (Article 2 of the Law on the Securities Market).
In the Russian Federation, the issuance of shares and bonds by credit institutions is regulated by the same regulations. These include laws on joint stock companies, the securities market and banks. Banks, when issuing shares and bonds, are also guided by the Instructions on the rules for issuing securities.
The instruction regulates in detail the issue of securities by a joint-stock bank, which can be carried out:
Upon establishment for the purpose of forming the authorized capital;
Increasing the size of the initial authorized capital by issuing shares;
Attracting borrowed capital by issuing bonds
and other debt obligations.
A credit institution may issue registered and bearer securities. Registered securities of a credit organization may be issued only in book-entry form, except for cases provided for by federal laws. Securities of a credit organization to bearer may be issued only in documentary form.
Banks can issue shares:
When creating a joint-stock bank;
To increase the authorized capital (issue of additional shares);
When consolidating and splitting already placed shares.
In the first case, all shares of the bank (first issue of shares)
distributed only among its founders. The issue of shares to increase the authorized capital of a bank created in the form of a joint-stock company (re-issue of shares) can be carried out only after full payment by the shareholders of all shares previously issued by the bank. Splitting and consolidation of already placed shares is carried out through a new issue of shares of the same category without increasing the authorized capital. In this case, during the placement process, previously placed shares are replaced by newly issued shares and, after registration of the results of the issue, are canceled.
The placement of shares can occur by:
1) accepting contributions from investors to the authorized capital of the bank in the form of bank buildings owned by them, and, if there is permission from the Board of Directors of the Central Bank of the Russian Federation, other property in non-monetary form. The composition of non-monetary funds contributed to pay for the authorized capital of the bank and their size (except for bank buildings) are determined by the Board of Directors of the Central Bank of the Russian Federation. The maximum amount of property in the form of bank buildings (premises) in the authorized capital of the newly created bank should not exceed 20%;
2) sale of shares by concluding purchase and sale agreements with buyers for the agreed number of shares for the currency of the Russian Federation and foreign currency by the issuing bank. In this case, the issuing bank can use the services of intermediaries (financial brokers) acting on the basis of commission or commission agreements with the issuing bank;
3) re-registration of previously contributed shares - when transforming the bank from a limited liability company to a joint-stock company;
4) capitalization of other own funds of banks in the manner prescribed by law and accrued but not paid dividends;
5) conversion of previously issued convertible securities into them - in accordance with the terms of their issue and current legislation;
6) conversion of securities of reorganized banks into them;
7) consolidation of shares;
8) splitting shares.
The legality of issues of shares of commercial banks is the registration of the issue with the Central Bank of the Russian Federation. To register, the issuing bank is required to submit an application for registration, a decision on the issue of securities, an issue prospectus, and other documents, a list of which is given in the Instructions on the Rules for the Issue of Securities. Upon state registration of an issue of securities, they are assigned a state registration number.
A credit institution has the right to place bonds. The placement of bonds by the issuing credit organization is carried out by decision of the board of directors (supervisory board) of the credit organization, unless otherwise provided by the charter of the issuing credit organization. The issue of bonds is allowed only after full payment of the authorized capital. The nominal value of all bonds issued by a credit institution must not exceed the amount of the authorized capital or the amount of security provided to the credit institution by third parties for the purpose of issuing bonds.
The issue of shares and bonds by banks can take place in seven stages.
1. Making a decision on the issue of securities. The decision to issue securities is made either by the general meeting of shareholders or by the bank's supervisory board.
2. Preparation of the issue prospectus. The issue prospectus is prepared by the bank's board and signed by its chairman and chief accountant.
3. Registration of the issue of securities and prospectus. To register the issue, the issuing bank submits the following documents to the Department of Licensing Activities and Financial Recovery of Credit Institutions of the Central Bank of the Russian Federation or its territorial offices at its location:
Application for registration;
Extracts from the minutes of the meeting of shareholders or the board at which the decision to issue securities was made;
Prospectus;
A document confirming the approval of this issue with the relevant institution of the Ministry of the Russian Federation for Antimonopoly Policy and Entrepreneurship Support (for banks whose authorized capital is more than 500 million rubles);
A copy of the payment order for payment of tax on transactions with securities (for registration of the issue prospectus).
The Central Bank of the Russian Federation may refuse to register the issue of shares in a number of cases, an exhaustive list of which is given in the Instructions on the Rules for the Issue of Securities. These include violation by the issuing bank of the legislation on securities, the procedure for drawing up and processing registration documents for the issue of securities, failure to submit within 30 calendar days at the request of the registering authority all documents required for state registration of an issue (additional issue) of securities or registration of a prospectus securities, etc.
Refusal to register an issue of shares can be appealed to the Central Bank of the Russian Federation or in court. The rules for maintaining records and reporting on transactions with securities for banks are established by the Ministry of Finance of Russia jointly with the Central Bank of the Russian Federation.
4. Publication of the issue prospectus. The issuing bank publishes it in the form of a separate brochure with a circulation of at least 50 thousand copies. At the same time, he reports through the media about his issue of securities.
5. The sale of issued securities begins after registration and publication of the issue prospectus.
6. Registration of the results of the issue is carried out upon completion of the sale of securities. The issuing bank analyzes its results and draws up a report on the results of the issue, signed by the chairman of the board of the bank and submitted to the registration authority, which, within two weeks after its consideration, must (in the absence of claims against the issuer) register the report and results of the issue. He issues the bank a registration document, one copy of the registration report and confirms the state registration number of the securities issue. If a registration of the results of a securities issue is refused, the registration authority must send a letter to the issuing bank clearly stating the reasons for the refusal.
7. The publication of the results of the issue of securities must be carried out by the issuing bank in the same publication in which the notice of the issue was previously published, indicating the data that the bank considers appropriate to bring to the attention of the public, as well as the place where those interested can familiarize themselves with the full report on the results of the issue.
Article 13 of the Federal Law of the Russian Federation dated 03/05/1999 No. 46-FZ “On the protection of the rights and legitimate interests of investors in the securities market” establishes the limitation period for cases of declaring the issue of securities invalid - one year from the date of commencement of the placement of securities.
An analysis of the current regulatory framework allows us to conclude that commercial banks can act on the securities market in the following capacities:
As investors, i.e. carry out transactions with securities on your own behalf and at your own expense;
As issuers in the broad sense of this concept, i.e. issue both emission and non-equity securities;
As professional participants in the securities market.
Securities are exchange-traded goods with which various types of transactions are made. Such transactions of banks on the stock market are made with the aim of making a profit due to changes in the price of securities over time.
The main way to classify exchange transactions is their division into cash and urgent, the basis of which
serves as the deadline for transfer of securities.
Cash transactions, or transactions for cash, are made for the purpose of acquiring securities and, from a legal point of view, represent purchase and sale agreements. The execution of such a transaction (carried out outside the exchange) must follow within several days after its conclusion.
Futures transactions, unlike cash transactions, provide for a certain period of time between the conclusion of the transaction and its execution. In accordance with the rules of the exchange, the execution date can be either the last day of the month or its middle. Execution of transactions within the specified time frame is called liquidation. Futures transactions must be executed within the time period specified in the contract and at the price fixed therein.
There are three main types of simple forward transactions:
1) purchase with transfer of securities by a certain date. The execution of the contract is confined to it without any other condition. This transaction differs from a cash transaction only in the execution period;
2) purchase with daily transfer. In this case, the buyer has the right to demand the transfer of securities before a certain date every day at his discretion;
3) purchase with transfer upon notice, when the seller has the right to transfer securities to the buyer before a certain date upon prior notice to him about this.
Among derivatives transactions, options and futures stand out.
An option is a type of forward transaction in which one of the parties - the buyer, by paying a remuneration (premium) to the seller, acquires the right to buy (sell) within a specified period at a certain price the underlying asset that constitutes the option, and the other party to the transaction - the seller - is obliged to execute it within a specified period of time at a certain price at the request of the buyer (Fig. 7).
Option features:
1) this is a type of exchange transaction in the form of an exchange contract for the purchase or sale of a specific type of securities at a fixed price within an agreed period;
2) the option is exercised at a price determined at the time of the transaction;
Rice. 7. Types of option transactions
3) the buyer pays the seller a premium of at least 5% of the transaction amount;
4) a buy (sell) option provides only the right, but is not an obligation, to buy (sell) securities at a fixed price;
5) the object of the option is a contract, which includes the type of securities, their quantity, price, period and conditions for its execution;
6) within the established sale period, the buyer of the option has the right to sell it at the current price to a third party.
A futures is a contract for the purchase and sale of an underlying asset (an agreement to receive funds based on changes in the price of the underlying asset) with the fulfillment of obligations at a specified date in the future, the terms of which are determined by the specifications of the trade organizer.
The terms of the futures transaction are developed by the exchange itself. They are standard for each type of asset (securities). In the terms of futures transactions, the volume of the transaction, time, place and method of delivery are strictly defined. The only variable is price. The identical conditions of futures transactions make them highly liquid, which has allowed the formation of a wide market for futures contracts.
An offset transaction is the opposite transaction in relation to a previously completed one. Thus, the seller of a futures contract must buy the same futures contract, and the buyer must sell it.
Performing such actions allows you to close your exchange futures position and no longer bear obligations to fulfill the contract, which are transferred to new counterparties.
There are types of premium transactions that allow you to limit losses when making futures transactions (Fig. 8).
Rice. 8. Types of premium transactions
A transaction with a premium gives one party, in exchange for payment to the other party a certain remuneration (premium), the right to choose one of several options for intended actions: to fulfill the contract or to deviate from it. The premium is paid in advance at the conclusion of the transaction or at the time of performance, together with a statement as to whether the party will exercise his right of choice or not.
Report-deport. This transaction consists in the fact that one party (the deporter) sells to the other (the reporter) a certain number of specific securities and undertakes to buy them back at the daily rate at a certain moment, while the reporter acquires this number of securities from the deporter and undertakes to sell them to the deporter at the rate day at the specified time.
A multiple transaction is that the party whose assumption about a change in the exchange rate was realized and it turned out to be a winner has the right to oblige (according to its needs and capabilities) the losing counterparty to buy (sell) a multiple, i.e. increased by two, three, five times or more (the limit value is usually set at the conclusion of the transaction), the number of securities in relation to the stipulated one.
A simple transaction with a premium consists in the fact that one or both parties stipulate the right, if changes in the price of securities are unfavorable for them, to refuse to complete the transaction or terminate it by paying the partner a specified amount (premium). Any transaction with a premium can be defined as a report-deport, supplemented by a condition for the payment of compensation, or as an option. The smaller the amount of compensation, the more profitable it is for the party that has agreed for itself the right to use it.
An extension transaction is either an option or a report, supplemented by a condition on the right of the losing party to demand a delay in the execution of the transaction for a certain period.
Rack. When completing this transaction, one party (the buyer of the rack) undertakes to transfer to the other (its seller) a stipulated amount of money if, by the date agreed upon by the parties, the rate of specific securities is concluded in a certain range. The seller of the rack agrees to pay the same amount to the buyer if their rate is outside the extremes of this range.
A double-edged deal. When completing this transaction, the person paying the premium acquires the right to deliver by a specified date a certain number of shares at the highest agreed price, or to demand a certain number of securities by this date at a lower established price, or to refuse execution. Unlike the rack, in this case the premium is paid for a possible deviation from one of two actions, and not for the right to choose itself. Essentially this deal is a combination of a rack and a simple premium deal.
A demand transaction is that the premium payer acquires the right to demand, on any day before the liquidation period, the acceptance of securities by the other party (or transfer, depending on the condition). The transaction is executed not on the day on which the demand was made, but on the liquidation period at the exchange rate of the day of the statement. The calculation of the payer is to choose the day when a favorable exchange rate occurs.
A difference trade by its nature is a bet that is won by the one who is better informed about the state of the market and the circumstances that can influence it. If in a rack the dispute is about the price range and a specific exchange rate value, then in a difference transaction the dispute concerns only specific exchange rate values. Each participant in the transaction under consideration announces his forecast regarding the rate of certain securities on a specified date and undertakes, upon its occurrence, to pay the other party the difference between the rate he named and the rate of the day.
A bearer bank savings book is a bearer security issued by the issuing bank in the event of depositing funds and certifying the right of its bearer to dispose of them, deposit new sums of money with this fact reflected in the savings book and receive interest accrued for the use of funds with at a specified frequency and at a specified rate. Article 843 of the Civil Code contains rules on bearer savings books. A bearer bank savings book certifies the fact that the bank and the depositor have concluded an agreement bank deposit, and consequently, all those rights that are provided for by law for the depositor (Articles 834-842 of the Civil Code).
Transfer of a savings book means the transfer of rights of claim from the issuing bank of funds located in the account indicated in it.
