Final and Transitional Provisions of the Law of Ukraine on ‘Depositary System of Ukraine’ define that if within one year since this Law enforcement a securities owner has not concluded an agreement with a depositary institution selected by an issuer on servicing a securities account on one’s own behalf or has not transferred rights in securities to its securities account opened with another depositary institution, such owner’s securities (giving a right to participate in the issuer’s bodies) are not considered upon defining a quorum and upon voting in the issuer’s bodies.

Such restrictions shall be set by the depositary institution within one business day after the term mentioned in the previous paragraph has expired (on October 13, 2014).

CSD has developed a relevant functional guaranteeing technical facility for depositary institutions to perform corresponding actions within the term stipulated by legislation. 

The procedure of setting such restrictions  includes two stages:

• depositary institutions define and assign a certain status to all securities accounts opened with them; 
• depositary institutions set a ‘restrain mode’ to securities accounts of those owners, which have not concluded an agreement on securities account servicing with a depositary institution on their own behalf.

On September 1, 2014, CSD launched its functional providing depositary institutions with the possibility to perform actions at the first stage —  assigning a certain status to all securities accounts. For the Functional Manual please refer to the link. 

A ‘restrain mode’ is not set at the first stage, therefore, depositary institutions have time to prepare accounts for the second stage, i.e. setting restrictions. Such restrictions shall be set within very limited time-frame stipulated by the law.

A facility for setting a ‘restrain mode’ to owners’ securities accounts will be launched in the nearest future. A corresponding announcement will be further published.

In case of additional questions please contact CSD Technical Support Service via phone (044) 377-72-63.