Note of information on the new law on the Immobilization of Shares and Bearer Shares

Concern : Note of information on the new law on the Immobilization of Shares and Bearer Shares

A few months ago, a proposition of law (No. 6625) was introduced by the Finance Minister in the Chamber of Deputies on October 3, 2013 concerning the Immobilization of Shares and Bearer Shares.

This project had as main objective for Luxembourg to adapt its legislation on transparency and exchange of information for tax purposes in the identification of holders of Shares and Bearer Shares. These requirements were increasingly sought by international organizations including the FAG (Financial Action Group) and / or the Global Forum on Transparency and Exchange of Information.
The Luxembourg Government has chosen an appropriate way to meet the needs of their partners on one side and to maintain confidentiality to the Shareholders on the other side. To this end, it created the role of “Professional Depositary”.
This Act was passed by Parliament and published in the Official Journal of the Grand Duchy of Luxembourg MEMORIAL year dated August 14, 2014 under A – No. 161.

  1. 1.     What are Legal Persons involved :

Limited Companies, Partnerships Limited by shares and management companies of undertakings for collective investment established in the form of mutual funds that have issued Shares or Bearer Shares.

  1. 2.     What actions result of this new Law ?

The Management of companies which have issued Shares and Bearer Shares is required to appoint a   “Professional Depositary” within six months the entry into force of the Law, on or before February 18, 2015.

This Depositary holds Shares in deposit on behalf of the shareholder who is the owner.

The Management will also be required to file with the Register of Commerce and publish the Memorial C, the extract on the Appointment and Termination of the « Professional Depositary ».

List of Professional Depositories designated in the Law published in the August 14, 2014 :

-       Chartered Accountants
-       Public Auditors and Certified Public Auditors
-       Credit Institutions
-       Professionals in the Financial Sector
-       Wealth Managers
-       Lawyers
-       Notaries

The Depositary shall be in no case a Shareholder of the issuing company.

  1. 3.     How is organized the transfer of the Shares and Bearer Shares with the Depositary ?

The Owner gives its Shares and Bearer Shares within 18 months of the entry into force of the law on or before February 18, 2016, to the Depositary who shall proceed to the inscription  in the registry. At the written request of the Holder, the Depositary may give him a certificate confirming registration in the Register of Shares and Bearer Shares delivered by the Holder.


Included are also following informations :

-       The exact description of the Sharholder
-       The indication of the number of shares
-       The date of deposit
-       The confirmation of transfert or conversion into registered shares and the date

Each Owner of Bearer shares may only be aware of the  entries him concerning.

  1. 4.     What happens to the voting rights attached to the Shares and Bearer Shares ?

If the Shares have not been converted in a period of 6 months from the entry into force of the law voting rights are suspended including rights to dividend, including their admission to general meetings.

  1. 5.     What happens to Shares that haven’t been immobilized ?

If the shares were not converted in a period of 18 months from the entry into force of the law then there shares should be offset by a reduction in the subscribed capital by a corresponding amount.

  1. 6.     On which conditions a Depositary can be dispossessed of listed shares on the books ?

The Depositary can not be dispossessed of the Shares except in the following cases where it must return the shares:

-       To his successor in the event of termination of services,
-       To the Company upon conversion of bearer shares into registered shares, upon redemption by the Company of its own shares in accordance with the law of 10 August 1915 on commercial companies,

Please note that the responsability of the Depositary is incurred if it derives its obligations set out in the law, the same rules, are as well applicable to the management body.

  1. 7.     What other fines and penalties exist ?

The Management can be condamned to criminal sanctions if it does not meet the legal obligations of its responsibility, or a fine of 5,000.00 to 125,000.00 EUROS for:

-       The non-appointment of a the Depositary under the law passed ;
-       If it recognizes the rights attached to the Shares in violation of the provisions cited in the law passed;
-       If it does not annulate the shares which are not capitalized, as reflected in the law passed.

Dear Customers, Dear relations, in our capacity as Chartered Accountant, we can act as the Professionnal Depositary of Shares.

In case your company has issued Shares on Bearer Shares, we remain at your disposal to give you more information about what to do in your personal case.

C.G.E. Sàrl

Membre de l’Ordre des Experts Comptables


The full text of the new law published in Mémorial A N ° 161 of 14 August 2014 “Property, Shares and Bearer Shares” can be accessed via our website:

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