New legislation – identification holder of bearer shares
As per today, July 1, 2019, new legislation is effective allowing holders of bearer shares of Dutch NVs to be identified. The Dutch Parliament has listened to the recommendations made by, amongst others, the Financial Action Task Force (FATCA). The organizations that are part of the task force focus on preventing tax avoidance and combatting money laundering and the financing of terrorism.
Conversion bearer shares
Pursuant to the new legislation, bearer shares (in listed companies) can only be issued by way of a global certificate (“verzamelbewijs“), which certificate must be held by the central institute (i.e. Euroclear Nederland) or an intermediary (i.e. a bank or an investment company). This allows for the holders of the bearer shares to be identified through their securities account.
Dutch NVs will have to amend their articles of association in order to convert the issued bearer shares, which have not been included in a global certificate, into registered shares prior to January 1, 2020. If the articles of association have not been amended by then, the conversion of the shares into registered shares will take place by operation of law as of January 1, 2020. The NVs are still obliged to amend their articles of association in order to comply with the law.
Consequences for shareholders
After the conversion the shareholders must surrender their bearer share certificates at the company prior to January 1, 2021. Shareholders will not be able to exercise their shareholding rights until they have made such surrender.
Bearer shares that are not handed in prior to January 1, 2021, shall be deemed to be acquired by the company itself for no consideration, regardless of whether or not the articles of association of the company allow for the company to acquire shares in its own capital. The former shareholder, however, will retain the right to request for a replacement of its bearer shares until January 1, 2026.