Errors in the issuer's register: how a company corrects details of an issue and entries in shareholders' accounts

With book-entry shares, nothing stands outside the records. The number of shares, their nominal value and who holds them are determined by the issuer’s register and by holders’ accounts. If an error appears in them, the company usually discovers it at an inconvenient moment: at a general meeting, when paying a dividend or during due diligence before a sale. This article addresses errors from the issuer’s perspective, that is, from the perspective of the company that issued the shares.

What the issuer’s register contains

The central securities depository maintains only one issuer’s register for each issuer (Section 107(2) of the Securities Act). It contains details of the issuer, including its LEI code, and details of individual securities, in particular their type, ISIN, number of units and share in the issue (Section 107(4)). These details should correspond to the articles of association and to the position entered in the Commercial Register. Any discrepancy feeds through into everything derived from the records, from the list of holders before a general meeting to the calculation of dividends.

Where errors arise

There are three common points. The first is the issue of the shares. A book-entry security is issued at the moment it is credited to a holder account (Section 13(1)), so an incorrect account number or an incorrect number of units in the crediting instruction means that the shares come into existence in the hands of a different shareholder or in a different quantity. The second is an amendment to the terms of the issue, for example on an increase or reduction of share capital or a change of nominal value, to which the Securities Act and special legislation apply (Section 12(6)). The third is changes to details of the issuer that are not reflected in the register in time. Before registering a change to or cancellation of a security, the issuer may register a suspension of the right of disposal, for a maximum of ten days in advance (Section 28(3)(e)), so that the shares cannot be dealt in while the change is being made.

A control point: the extract from the issuer’s register

The central securities depository provides the issuer with an extract from the issuer’s register on each issue, amendment or cancellation of an issue, unless otherwise agreed, on each conversion of the form of a security and at the issuer’s request (Section 107(5)). This extract is the best opportunity to catch an error straight away. Compare it with the general meeting’s resolution, with the articles of association and with the extract from the Commercial Register and, where shares are being credited, also with the list of first acquirers and their account numbers.

The issuer’s objection and its reach

If the register or the entries in accounts do not correspond to what the issuer gave the depository, the issuer files an objection with the central securities depository under Section 108(1). Its advantage is that it does not stop at the depository’s records:

On the basis of an objection by the issuer which it recognises as justified, the central securities depository must carry out a correction or completion in the member’s records as well and inform the member of this fact without delay.

— Section 108(1) of Act No. 566/2001 Coll. (unofficial English translation)

Otherwise the depository may not make entries in accounts maintained by members; a correction based on an issuer’s objection is one of the express exceptions (Section 104(4)(e)). The issuer therefore does not have to approach each bank and dealer with which shareholders hold accounts. The correction is made as at the day on which the incorrect entry was made, and the depository sends the persons concerned, including the issuer, an extract with reasons (Section 108(4)). Under the CDCP fee schedule in force from 1 January 2026, the correction itself costs EUR 100 per request, payable only once the objection has been recognised; if the depository caused the error by its own conduct, no fee is charged.

The position differs where the error already existed in the issuer’s instruction, for example an incorrectly stated shareholder account number. The depository then entered what the issuer instructed it to enter. According to CDCP’s materials for issuers, such a correction is likewise dealt with on the basis of an issuer’s objection, with the issuer having to satisfy the depository as to what the entry should have looked like. Liability for loss caused by such an instruction rests with the person who gave it incorrectly or incompletely (Section 108(6)). What a retrospective correction means for dividends paid and general meetings held in the meantime is examined in the article correction of an entry with retrospective effect.

How to avoid errors

Most errors can be avoided by preparing the documentation properly. Before registering an issue or an amendment to it, we recommend that you:

• reconcile the resolution on the issue of or change to the shares with the articles of association and with the position in the Commercial Register,
• verify with each first acquirer that they have a holder account and that the account number is correct,
• consider, on changes to share capital, a suspension of the right of disposal for the necessary period,
• check the extract from the issuer’s register on the day it arrives and not file it away unread.

The registration procedure, from ISIN to the crediting of shares, is described in registration of a share issue and ISIN. We prepare registrations and amendments of an issue so that the documentation is right first time, through our registration of book-entry share issues service. If an error is already in the register, we prepare an objection against an incorrect entry on the issuer’s behalf and ensure that the correction is reflected at member level as well.