Legal Q&A · 03

Securities & Shareholders — questions and answers.

8 answered questions on a subject we handle every day. Find related services in the catalogue: Securities & Shareholders.

Answered by , Czech and Slovak attorney, admitted to the Slovak and Czech Bars (SAK 300422 · ČAK 19654).

Search questions in this area

Search covers questions, short answers and topics. To search the whole Q&A, visit the Q&A homepage.

Questions about Securities & Shareholders

  1. We have an old securities account at CDCP from privatisation. What should we do with it? A holder account opened at the central securities depository for an individual by 30 September 2015 is treated as an unassigned holder account. Instructions for it are submitted through a depository member, and at the holder's request both the depository and the member must move the securities to an account with the member free of charge. However, part of this regime only takes effect once a technical system is launched, so the current position needs to be checked.
  2. We are a joint-stock company. Who maintains our shareholder list? This depends on the form of the shares. For book-entry shares, the records of book-entry securities maintained by the central securities depository replace the shareholder list, so the company does not maintain a separate list. For certificated registered shares, the issuer must enter into an agreement with the central securities depository to maintain the shareholder list without delay after issuing the shares. Failure to do so is often one of the first findings in an acquisition.
  3. We have inherited securities. How do we access the account at CDCP? The key document is the final inheritance decision, on the basis of which the securities are recorded in the heir's account. To retain inherited securities in their own account, an individual will generally open an account with a member. For a subsequent transfer, however, Section 18b permits an instruction directly from the deceased's account under the prescribed conditions, without the intermediate step of transferring the securities to the heir's account. Bear in mind that the duty to provide a free annual statement does not apply from the holder's death until the inheritance decision becomes final.
  4. What is the difference between a transfer, a transmission and a movement of securities between accounts? A transfer changes the holder of a security under an agreement; a transmission changes the holder as a result of another legal event, such as inheritance; and an account movement moves securities between accounts of the same holder. The legal basis also determines the instruction and form used for the central securities depository. The depository will reject and return an incorrectly selected instruction, so it is worth clarifying the distinction before filing.
  5. How do we create a pledge over shares, and what is entered in the pledge register? A pledge over securities arises only upon registration in the pledge register maintained by the central securities depository: signing the pledge agreement alone is insufficient. The pledgee or pledgor submits the registration instruction with written confirmation of the agreement's contents. For shares in an account maintained by a member, the instruction is submitted through that member. Alongside the parties and securities, the register records the amount and maturity of the secured claim.
  6. What does suspension of the right to dispose of securities mean, and who can have it registered? Suspension of the right of disposal (PPN) is an entry in the records of the central securities depository or a member that temporarily blocks dealings in securities: no transfer is registered while it applies. The holder, a pledgee, an enforcement officer, the issuer and other persons listed in Section 28 of the Securities Act may instruct a suspension for a fixed or indefinite period. However, PPN does not prevent a transmission, such as on inheritance.
  7. Is the shareholder register of a simple joint-stock company public, and how can I obtain an extract? Yes. The shareholder register of a simple joint-stock company is public: the central securities depository publishes the data, except shareholders' personal identification numbers and dates of birth, on its website, and anyone may request an extract in writing. Who owns a j. s. a. and how many shares they hold is therefore no secret. This needs to be considered when setting up an ESOP or bringing in an investor.
  8. We have incorporated a joint-stock company. How do we register a share issue at CDCP and obtain an ISIN? For book-entry shares, registering the issue with the central securities depository is mandatory: the shares come into existence as securities only when credited to holder accounts. The process has three stages: allocation of an ISIN at the issuer's request, an issue registration agreement and creation of the issuer's register, and crediting the shares to shareholders' accounts. Until then, the company is registered in the Commercial Register but has not issued its shares.

Cannot find your question? Ask us — we will reply by email. Answers in this Q&A are general information and do not constitute legal services.

Other Q&A topics

Need help in this area?

Tell us about your situation. We will reply within 24 hours.

A Q&A answer explains the rule; a consultation addresses your situation. For each topic, we can explain what needs to be done and by when.

Book an initial consultation Ask your own question
Contact a lawyer