On May 2017, Law n.º 15/2017 approved the end of bearer shares and thus established the obligation of converting the remaining ones on the market. The changes introduced by this legislation are another measure taken by country to combat money laundering.
The recently published Decree-Law n.º 123/2017 establishes the necessary guidelines for the implementation of Law n.º 15/2017 and has altered a few of the provisions of the Portuguese Companies Code and Portuguese Securities Code.
The following are the most significant changes made:
- The conversion of bearer shares takes effect:
- Annotations on the individual registry account of the bearer shares or certified securities integrated in centralized systems; or
- By replacing the securities or altering their statements, done so by the issuer.
- Bearer shares issuers can promote the process of conversion into nominal shares.
- Bearer shares integrated in centralized systems that have yet to be converted by the issuer’s initiative, may be converted by the managing entity of said centralized system.
- Issuing entities and holders of bearer shares have a six-month deadline to perform the conversion, from the publication of Law 15/2017, meaning it must be done until the 4th of November of the current year.
- After the date, holders of bearer shares retain the right of converting them into nominal shares but will be barred from receiving dividends or any other forms of income until the conversion is made.
- The necessary changes to the company’s contracts and other related documents concerning the requirements for the conversion of the bearer shares may be decided by the Board of Directors, without previous approval of the General Assembly.
- Any acts of commercial registry practiced under the procedure laid by this Law will be exempt from paying exercise duty.
Please take into consideration that the conversion of bearer shares into nominal shares is subjected to mandatory publication on the e-Justice Portal.