The Moscow Arbitration Court suspended the order of the Federal Service for Financial Markets (FSFM) to cancel the license of OJSC Central Moscow Depository (CMD). In a month, the case on the legality of this order will be considered. This will allow the recorder to continue working. However, its main clients have already chosen new registrars.

On Monday, the court granted the Central MD's request to take interim measures on the claim of the illegality of the FFMS order. The decision was made before the court decision entered into legal force on the claim of the Central MD on the illegality of the order of the Federal Financial Markets Service to cancel the license to carry out registrar activities. As stated in the court’s ruling, “failure to take interim measures may lead to significant damage to the applicant in the case, violation of the rights of the applicant, issuers and other third parties.” Thus, the CMD will continue to operate as usual. The case itself will be considered on February 28.

Let us recall that the Federal Financial Markets Service decided to revoke the TsMD license on September 9, 2010. However, the entry into force of the order was postponed until February 1, 2011. This was done so that the companies serviced in the Central Depository had time to transfer their registers to other registrars and, in addition, so that the companies carrying out the placement of shares (primarily such as FGC UES) could complete it.

CMD is one of the largest Russian depositories. Operating since 1994. As of December 31, 2009, there were 1,557 issuers servicing, the number of personal accounts was 5.85 million. Revenue in 2009 amounted to 867 million rubles, net profit - 170 million rubles. The shareholders of TsMD are individuals, the main ones being Chairman of the Board of Directors Alexey Korolev (about 85%) and Chairman of the Board Natalia Agafonova (10%).

However, delaying legal proceedings is unlikely to allow clients to return, since the main issuers serviced by the CMD have already chosen new registrars. According to Interfax, already at the beginning of December last year, out of almost 1.6 thousand issuers whose registers were maintained by the Central MD, about 500 sent notices of termination of contracts. According to Kommersant’s estimates, by the end of January, from the “registers” (that is, issuers with more than 500 shareholders) have decided to change the registrar; more than 80 issuers have already decided on new registrars. At the same time, the distribution of CMD clients among large registrars occurred quite evenly. The leaders remain Computershare Registrar (10 issuers, 1.2 million shareholders), Registrar R.O.S.T. (18 issuers, about 1 million shareholders), SR-DRAG (4 issuers, about 900 thousand shareholders), Status (11 issuers, about 500 thousand shareholders), Irkol (1 issuer, about 300 thousand shareholders ) and Professional Registration Center (1 issuer, about 300 thousand shareholders). Among other registrars that received CMD clients, one can note “Reestr-RN” (5 issuers, 51.5 thousand shareholders), “VTB Registrar” (5 issuers, approximately 15.6 thousand shareholders), “New Registrar” (8 issuers, 15 thousand shareholders). Only one of the largest clients - the Fortum company (about 300 thousand shareholders) - has not yet decided to change the registrar.

Dmitry Mikhailovich

The court returned the work to CMD, but not the clients