Frequently-Asked Questions
On the procedure for computing the terms established for offering securities
In accordance with the Regulations on Listing and Admitting Securities for Offering and Circulation on the MICEX Stock Exchange Closed Joint Stock Company (hereafter – MICEX SE CJSC), approved by the Board of Directors of the MICEX SE CJSC on May 26, 2006 (Minutes No. 3) (hereafter – Listing Regulations), securities issued by Russian or foreign issuers are allowed for offering, provided that their issue registration has been made in accordance with the requirements of the Russian law on securities, regulatory legal acts of the federal executive securities market authority, and other regulatory legal acts of the Russian Federation and under the condition that issuers have complied with the above-mentioned requirements of the law, including those on information disclosure.
When considering admitting securities for circulation on the MICEX SE CJSC, besides complying with the requirements of the Listing Regulations, compliance with the requirements of the Federal Law on the Securities Market and the Federal Law on Issuing and Circulating Government and Municipal Securities regarding disclosing information about the issue and conditions of the issued securities offering, is also necessary.
In accordance with Article 24 of the Federal Law on the Securities Market it is prohibited to offer securities through subscription of the securities’ issue when the state registration is accompanied by the securities’ prospect registration earlier than two weeks after the notice on the state registration of the securities’ issue is published in accordance with Article 23 of the Federal Law on the Securities Market.
In accordance with the Listing Regulations, the Directorate of the MICEX SE CJSC makes the decision on allowing a security to circulate and also specifies the start date of the offering. The correct computation of the two-week period stipulated in the Article 24 of the Federal Law on the Securities Market establishes the security offering’s starting date.
The set two-week term should be calculated in accordance with the requirements of Chapter 11 of the CC of RF, which provide for the following:
- The term, defined by the time period, starts on the day after the calendar date or event that specifies its start (Article 191 of the CC of RF);
- The term, computable in weeks, expires on the respective day of the last week of the term (S.4 Article 192 of the CC of RF);
- Should the last day of the term fall on a holiday, the term expires the next day (Article 193 of the CC of RF).
So, for instance, if the notice of the state registration of the securities’ issue was published on Monday, the 9th of June, 2003, the calculation of the two-week period would start from Tuesday, the 10th of June, 2003. The last day of the two-week period would be Tuesday, the 24th of June, 2003 and, the securities’ offering can start on the 25th of June, 2003.
In accordance with S.1 of Article 11 of the Federal Law on Issuing and Circulating Government and Municipal Securities, the conditions contained in the issue decision must be published in the mass media or disclosed by the issuer in another way no later than two working days prior to the start date of the offering. When determining whether a day is a working day or not, refer to Articles 111 and 112 of the Labour Code of the Russian Federation (hereafter — LC of RF). Also, in accordance with the Article 112 of LC of RF, “in the interest of a reasonable use of days off and workers’ holidays, the Russian government is entitled to reschedule holidays to other days”.
So, for instance, if the notice disclosing the conditions contained in the issue decision was published in the mass media in accordance with Article 11 of the Federal Law on Issuing and Circulating Government and Municipal Securities on June 10, 2003, the requirements established by this law would be fulfilled if the offering date fell after June 17, 2003. In accordance with Article 191 of the CC of RF, the course of the term starts on the working day after the publication of the conditions contained in the issue decision, which is June 11, 2003. Since, in accordance with Article 112 of the LC of RF, the 12th day of June is a holiday, we should not account for June 12 when computing the term, which is calculated in working days. In accordance with the Decree of RF dd. 30.10.2002 No.784 on Rescheduling Holidays in 2003 the holiday on Saturday, the 21st of June was rescheduled for Friday, the 13th of June. Thus, Friday, the 13th of June, Saturday, the 14th of June and Sunday, the 15th of June are all days off. Consequently, the second working day of the set term falls on the 16th of June, 2003. Thus, the offering of securities may be started on the 17th of June 2003.
Correct computation of the term until information about the start of securities’ offering on the MICEX SE CJSC is published is very important, since compliance with the Russian law on securities and the regulatory legal acts of the federal executive securities market authority is a licensing requirement and, in accordance with the procedure for licensing professional securities market activities in the Russian Federation, approved by the Order of the FSSM of Russia, dd. 16.03.2005 No. 05–3/pz-n, is mandatory for all professional securities market participants who act by virtue of the license given by the FSSM of Russia (FCS of Russia).
