Following the approval of the Law No. 15/2017, of 3 May, which prohibits the issuance of bearer securities, Decree-Law No. 123/2017, of 25 September, entered into force and establishes the regime for converting the bearer securities into registered securities.
We highlight below the main aspects regulated by this diploma:
-
Issuers of bearer securities shall promote the conversion process of such securities into registered securities within 6 months as from the date Law No. 15/2017, of 3 May, has entered into force, i.e., until 4 November 2017. Given the short transitory period, the diploma sets out that the amendments to the articles of association and to other documents concerning issuance conditions required for the conversion may be resolved by the management body of the issuer, no approval by the shareholders’ general meeting being required;
-
Regarding the procedure and means for conversion, issuers of bearer securities shall disclose, during the Transitional Period, an announcement informing the respective holders about the conversion process of said securities into registered securities. The referred announcement shall include certain information duly listed in the diploma;
-
The announcement shall be mandatorily disclosed in the website of the issuer, if any, and: (i) in the Portuguese Ministry of Justice Portal; or (ii) on the Information Disclosure System of the Portuguese Securities Markets Commission, for issuers of securities admitted to trading on a regulated market or in a multilateral trading facility, as well as for issuers whose capital is open to investment by the public;
-
The diploma further foresees the means through which the conversion of bearer securities into registered securities may operate at the issuer’s expense. In relation to securities integrated in a centralized system, the management entity of such system shall establish and disclose the conversion procedures to be adopted.
On the other hand, the diploma establishes, as in Law No. 15/2017, of 3 May, the consequences in case of non-conversion during the transitional period, setting out that bearer securities non converted into registered securities until the end of the transitional period only grant the right to request its registration in favour of the respective holders.
Furthermore, the amounts corresponding to dividends, interest or other incomes whose payment is suspended shall be deposited in a single entity legally entitled for such purpose, and shall be delivered, on the basis of instructions from the issuer, to the holders of the securities upon their conversion.
As regards to bearer securities integrated in a centralized system that have not been converted at the issuer’s initiative during the transitional period, this securities should be converted by the management entity of the centralized system until the last day of the transitional period, in accordance with the terms to be defined by said management entity.
Another requirement pointed out by this regime is that the issuers shall request the commercial registration of the amendments to the articles of association and to other documents subject to registration and required in order to comply with this diploma. In such sense, until the conversion process of the bearer securities is not completed under the terms set out in this regulation, the commercial registry of the issuer shall include a reference to the pendency of such process.
The diploma entered into force on the day after its publication.