Portugal – Prohibition of transfer of bearer securities and compulsory conversion in nominative

Portugal – Prohibition of transfer of bearer securities and compulsory conversion in nominative

Last 3rd May it was published Law nr. 15/2017 that approves the prohibition of issuance of bearer securities and imposes the conversion of existent bearer securities into nominative, thus amending Securities Code and Commercial Companies Code.
The entry into force of this law on the 4th May involves the following:
a) Prohibition of issuance of bearer securities;
b) Compulsory conversion of bearer securities into nominative within six months (until 3rd November 2017), with the following consequences (once the deadline has passed):

  • Prohibition of transfer of bearer securities;
  • Suspension of the right to the distribution of results arising out from bearer securities.
  • Regarding the conversion of bearer securities into nominative it is further subject to regulation by the Government yet to be approved within 120 days from 4th May 2017.
    We will, thus, have to wait for the Government regulation in order to initiate the conversion process although we can anticipate that it will involve the amending to the articles of association of the company and the substitution of the securities.

    Paulo Correia
    pcorreia@santiagomediano.com

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