Bearer Share Regime - Main Features And Upcoming Deadlines

The law on the immobilisation of bearer shares (the "Law") entered into force in Luxembourg on August 18th 2014 (the "Effective Date"). The Law aims to facilitate anti-money laundering efforts by improving transparency with regard to the identity of shareholders in Luxembourg companies.

The Law applies to bearer shares or units issued by the following commercial entities:

SAs (société anonyme); SCAs (société en commandite simple); regulated investment funds (SICAVs (société d'investissement à capital variable) and SICAFs (société d'investissement à capital fixe); and contractual co-ownership schemes (fonds commun de placement). Main features

The Law requires shares or units issued in bearer form to be deposited with a depositary authorised under the Law (the "Depositary"). Persons authorised to act as a Depositary include: credit institutions; asset managers; domiciliation agents; lawyers; auditors; accountants; and notaries.

The Depositary is responsible for maintaining the register of bearer shares in Luxembourg which shall include:

details of the holder of the bearer shares; date on which the shares were deposited; and details of any transfers of such shares, or their conversion into registered form. The Depositary may not be a shareholder of the company. The Depositary is responsible for holding the bearer shares on behalf of the shareholders and it is not authorised to transfer those shares, except to the company (in specific instances) or to a successor Depositary.

The holding of a bearer certificate is no longer sufficient evidence of ownership. Ownership of bearer shares is evidenced by a registration in the bearer share register.

The Law amends the law of 5 August 2005 on financial...