Securities Commission Proposes Mandatory Market-Price Buybacks

The State Securities and Exchange Commission has drafted amendments to the law on stock exchanges to better protect minority shareholders. One key amendment deals with additional share issues and would require majority share holders to buy out minorities who vote against share emissions at the market price that prevailed before the share issue announcement. The draft law defines market price as the average of bid and ask quotes. The draft would also update rules for brokers and asset managers and introduce a new system of recording securities transactions which is designed to put more emphasis on protection for shareholders. In related news, the PFTS has prolonged its suspension of trading in Zaporizhstal (ZPST: Susp), without announcing when it will next review the case. ZPST recently announced a buyback offer well below its pre-emission market price. Tom Warner: The general thrust of this draft law is excellent, and we’ll be looking more closely at the details later. It obviously won’t be a top priority for parliament, but there is some hope.