The government announced a substantial change in bearer shares
at the end of 2020, but the details were only finalised in April
2021. According to the new amendment, non-public joint stock
companies are now obliged to register shareholders holding bearer
shares.
Information about these shareholders (e.g. name, identity number,
address, number of shares, etc.) will be registered through the
system of the central registration authority either by the company
representatives or the shareholders themselves. Unless stated
otherwise, such shareholders will no longer be able to exercise
their rights under the law. Registration must be completed by
31 December 2021.
With the new amendments, it is fair to say that the anonymity of
shareholders holding bearer shares in non-public joint stock
companies has been obliterated. The shareholder's identity will
be registered in the system. In other words, transfers of such
bearer shares will be monitored and recorded. Remarkably, the
method of transferring bearer shares and registered shares, which
is one of the most fundamental differences between them, has
practically converged.
How did it work before?
The owner of the bearer shares was someone who had them in their possession and could transfer them simply by delivering possession to the transferee without registering the transfer in the share ledger.
Why the fundamental change?
The preamble to the law explains that bearer shareholders and their holdings will be monitored to reduce the risk of money laundering and financing of terrorism.
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