Ukraine Approves Procedure for Remote General Shareholder Meetings
On 16 April 2020, the National Securities and Stock Market Commission of Ukraine (the “NCSSM“) approved the Provisional Procedure for the remote holding of general meetings of shareholders and general meetings of members of corporate investment funds (the “Provisional Procedure“).
This is the NCSSM’s response to the quarantine restrictions in Ukraine imposed in March this year, and follows the recent amendments to legislation designed to mitigate the impact of the COVID-19 pandemic.
- The Provisional Procedure for the remote holding of general shareholders meetings and general meetings of corporate investment funds
- Agreement with the Central Depository for the provision of remote general meeting services
- New remote voting system
- Fee for arranging and supporting the remote meetings
Joint-stock companies, corporate investment funds and limited liability companies that issue securities may apply this Provisional Procedure.
In accordance with the Provisional Procedure, the following meetings may be carried out remotely:
- Annual general meetings of shareholders based on the results of the 2019 financial year;
- Extraordinary general meetings of shareholders;
- Annual general meetings of corporate fund members in 2020 based on the results of the 2019 financial year;
- Extraordinary general meetings of corporate investment funds.
Under the Provisional Procedure, meetings must be held either during the quarantine or no later than three months after its termination. Considering the necessity for due prior notice to be given to shareholders, such remote meetings may be held no earlier than 27 May 2020.
Under the Provisional Procedure, an annual general meeting shall be convened only by the supervisory board of a company, whereas extraordinary general meetings may be convened either by the supervisory board or the shareholders.
Following the decision to convene a general meeting, the supervisory board or respective shareholders must enter into an agreement with the Central Depository for the provision of remote general meeting services.
In order to hold a remote general meeting, the supervisory board must make a decision to postpone the general meeting scheduled under the regular procedure and to arrange a remote meeting.
This must then be communicated to all shareholders through the depository system of Ukraine, maintained by the Central Depository (the National Depository of Ukraine).
Following the decision to convene a general meeting, the supervisory board or respective shareholders must enter into an agreement with the Central Depository for the provision of remote general meeting services. The Provisional Procedure governs the terms and conditions of remote general meeting services.
Every shareholder who holds voting shares is entitled to exercise his or her right to manage the company by participating in the general meeting and voting. The voting is carried out by submitting ballots to the depository institution which maintains the securities account of the shareholder.
In addition, each shareholder is entitled to receive, and the company is obliged to provide, documents which shareholders can review in order to prepare for the general meeting. These must be sent in electronic form (copies of documents) upon request and be free of charge.
According to the Central Depository, the new remote voting system will operate through the currently available Client Portal web-service and will become available early in May, which will allow companies to test the software before the earliest possible date for remote shareholder meetings (27 May 2020). The system already allows for the sending of notifications about meetings to shareholders.
The Central Depository has set its fee for arranging and supporting the remote meetings at UAH 10 000 (approximately EUR 330).
As it is still difficult to predict when quarantine restrictions for gatherings and travel will be lifted, we advise all JSCs and issuers of securities to consider convening their annual and extraordinary general meetings with the use of the Provisional Procedure.
All shareholders of Ukrainian companies are advised to ascertain whether their companies intend to use the Provisional Procedure and make sure that their contact details which may be required for notification (e-mail address, phone number) are up to date.