On 15th July, 1998 new legislation was passed relating to theownership of shares and convertible bonds issued by both Belgianpublic limited companies (NV or SA) and private companies (BVBA orSPRL). The legislation makes it possible to separate legalownership (mainly voting and subscription rights) from beneficialownership (the right to dividends and other distributions) insecurities of this type.

Separation can be achieved by vesting legal ownership of thesecurities in an intermediate incorporated vehicle, such as aninvestment company or a non-profit association. The vehicle will bethe holder of the registered or bearer shares issued by theoperating company and will issue certificates representing theright to dividends and other distributions in respect of thoseshares. The certificates may be issued in registered, bearer ordematerialised form, but bearer certificates may not be issued ifthe underlying shares are registered.

The intermediate vehicle will be fully tax transparent and willbe under a duty to redistribute immediately to the beneficial ownerall dividends or other cash distributions received in respect ofthe underlying shares, after the deduction of its costs.

If the shares are publicly traded, the intermediate vehicle isnot allowed to sell the underlying shares. In the absence of anyprovision to the contrary, certificates may be exchanged at anytime at the request of the beneficial owner. This right may only bewaived for a limited time. These new provisions will enter intoforce at a date yet to be determined. Marc Van Der Haegen,Liedekerke Wolters Waelbroeck & Kirkpatrick.