UZBEKISTAN LAW ON SECURITIES AND STOCK EXCHANGE

Transcription

1 UZBEKISTAN LAW ON SECURITIES AND STOCK EXCHANGE Important Disclaimer This does not constitute an official translation and the translator and the EBRD cannot be held responsible for any inaccuracy or omission in the translation. The text should be used for information purposes only and appropriate legal advice should be sought as and when appropriate.

2 LAW OF THE REPUBLIC OF UZBEKISTAN On Securities and Stock Exchange September 2, No.918-XII Chapter I. Principal Provisions 3 Article 1. Concept of security papers 3 Article 2. The legislation on securities and stock exchange 3 Article 3. Kinds of securities 3 Article 4. Shares 4 Article 5. Bonds 4 Article 6. The treasury obligations 5 Article 7. The deposit certificates 5 Article 8. Bills of exchange 5 Article 8-1. Securities' derivatives 5 CHAPTER II. STATE REGISTRATION, ISSUE OF SECURITY PAPERS 6 Article 9. The circulation of securities 6 Article 10. Emission of security papers 7 Article 11. The information on emission 7 Article 12. The information on activity of the emitter 8 Article 13. Kinds of emission 8 Article 14. The stamp tax and state duty 9 Article 15. Distribution of security papers 9 Article 16. The participants of the market of security papers 9 CHAPTER III. STOCK EXCHANGE 9 Article 17. Concept of stock exchange 9 Article 18. Registration of stock exchanges 10 Article 19. The founders and members of stock exchange 10 Article 20. Rules of exchange transactions 10 Article 21. The order of fulfilment of the bargains 11 Article 22. Rights of stock exchange 11 Article 23. Financing of activity of stock exchange 11 Article 24. The discontinuance of activity of stock exchange 11 CHAPTER IV. FINAL provisions 12 Article 25. Organization of the control at operations with security papers 12 Article 26. The appeal of wrongful actions and decisions of a body of state management and other body 12 Article 27. The international contracts 12

3 LAW OF THE REPUBLIC OF UZBEKISTAN On Securities and Stock Exchange September 2, No.918-XII As amended by the Laws of the Republic of Uzbekistan of September 23, 1994, December 22, 1995 and April 26, 1996, August 30, 1996, December 27, 1996 Resolution of the Supreme Council of the Republic of Uzbekistan "Procedure of inuring of the Law of the Republic of Uzbekistan "On securities and Stock Exchange" This Law defines conditions and order a issue and circulation of securities, regulation of activity of the participants of the market of securities, as well as principles of organization and activity of stock exchanges with the purposes of assistance to development of economy of the Republic of Uzbekistan. CHAPTER I. PRINCIPAL PROVISIONS Article 1. Concept of security papers Securities - money documents, certifying property right or relation of loan between issued their person and their owner, providing payment of the income in a kind of the dividends or percents and opportunity of assignment, following from these documents, to other persons. Securities can have the form of the forms, certificates or records on the bills and to be used for realization of accounts, as well as the lien under the credits. The securities are distributed among legal and physical persons on the voluntary beginnings. Irrespective of the form of the introduced contribution the cost of securities is expressed and paid in monetary unit of the Republic of Uzbekistan, and in cases, stipulated by conditions of their issue, is paid in a foreign currency (under the shares - and by assignment of the property Article 2. The legislation on securities and stock exchange The relations, connected with issue and circulation of securities, activity of the participants of the market of securities, are adjusted by the present Law and other legislation of the Republic of Uzbekistan. Article 3. Kinds of securities The action of the present Law is distributed to following kinds of securities: - shares; - bonds; - treasury obligations; - deposit certificates; - bills of exchange. The essential elements of the shares, bonds and treasury obligations and securities' derivatives are defined by the Ministry of finance of the Republic of Uzbekistan, and deposit certificates

4 and bills of exchange - Central bank of the Republic of Uzbekistan. (As amended by the Law of the republic of Uzbekistan of December 22, 1995) Securities can be nominal and to bearer. Securities are nominal, if for realization of the property rights, connected with their possession, registration of a name of the owner the emitter or under his commission - organization, carrying out professional activity on securities is necessary. The assignment of the nominal security paper from one owner to other is reflected by change of appropriate records in the account. Securities are considered as the documents to bearer, if for realization of the property rights, connected with their possession, it is enough presentation of the securities. The securities to bearer address freely. Article 4. Shares Share - security paper without established validity, certifying entering legal or natural person of the certain contribution in authorized fund of joint-stock company, confirming participation of her owner in the property of this company and right giving to him to reception of the dividend and, as a rule, on participation in management of these company. The decision on issue of the shares is maid by the founders of joint-stock company or general meeting of the shareholders. The purchased share can not be realized to issued her joint-stock company, if it is not stipulated by the statute of company. At transformation of a state enterprise in joint-stock company of an open type the statement by the State committee of the Republic of Uzbekistan on assertion of state property and support of entrepreneurship together with the State commission on securities and stock exchange under the Ministry of finance of the Republic of Uzbekistan of the emission project is the decision on shares issue. (Introduced by the Law of the Republic of Uzbekistan of December 22, 1995) Article 5. Bonds The bond - security paper, certifying entering by the of her owner of money resources and confirming obligation to reimburse to it the nominal cost of the securities in term stipulated in it with payment of fixed percent (if other is not stipulated by conditions a issue ). Issued the bonds of following kinds: - bonds of the internal republican and local loans; - bonds of the enterprises. The bonds can be issued ordinary and advantageous, percentage and without interest (target), freely addressed or with limited around by the circulation. Compulsory essential element of the target bonds is the indication of the goods (services), under which they are issued. The bonds of the internal republican and local loans are issued to bearer. The decision on issue of the bonds of the internal republican and local loans is accepted, accordingly, Cabinet of the Ministers of the Republic of Uzbekistan and local bodies of a state authority. In the decision the emitter, the condition a issue and order of accommodation of the bonds should be defined. The bonds of the enterprises can be issued by the enterprises of all forms of the property. The bonds do not give their owners of the right on participation in management of enterprise. The decision on issue of the bonds of the enterprises and joint-stock companies is adopted accordingly by administration and executive body (board) and is made out by the protocol. The issue of the bonds of the enterprises for formation and updating of a authorized capital of the emitters, as well as for reimbursement of expenses, bounded with their economic activity, is not admitted.

5 The joint-stock companies can issue the bond on a sum not more than 20 percents from the size of a authorized capital and only after complete payment of all issued shares. The size of a sum a issue of the bonds on the enterprises of other forms of the property is defined by the State commission on securities and stock exchange under the Ministry of finance of the Republic of Uzbekistan. (As amended by the Law of the Republic of Uzbekistan of December 22, 1995) Article 6. The treasury obligations The treasury obligations of the Republic of Uzbekistan - kind of securities to bearer, certifying entering by the their owners of money resources in the budget and giving rights to reception of the fixed income during whole term of possession by these securities. Issued following kinds of the treasury obligations: - long-term - for a term from 5 and more years; - intermediate term - from 1 year till 5 years; - short-term - up to one year. The decision on issue of the long-term and intermediate term treasury obligations is adopted by the Cabinet of the Ministers of the Republic of Uzbekistan. The decision on issue of the short-term treasury obligations is adopted by Ministry of finance of the Republic of Uzbekistan. In the decision on issue of the treasury obligations conditions of payment of the incomes and repayment of the obligations are defined. Article 7. The deposit certificates The deposit certificate is the certificate of the bank - emitter on the contribution of money resources, certifying right of the investor or his assignee on reception on expiration of established term of a sum of the contribution and percents on it. The rules a issue and registration of the deposit certificates are defined by Central bank of the Republic of Uzbekistan. Article 8. Bills of exchange (Article 8 amended by the Law of the Republic of Uzbekistan of December 22, 1995) Bill of exchange - securities, certifying unconditional obligation of drawer to pay till approach term of specified in it certain sum of money to owner of a bill (to holder). The bills are subdivided on treasury and commercial, on promissory note and draft. Promissory note is the document containing unconditional obligation of the drawer to pay certain sum of money to drawee either on his order or on stipulated term or under demand. The draft is the document containing unconditional order of drawee directed to drawer for payment of certain sum of money to the drawee or under his order to another person in stipulated term or under demand. At this payer has to confirm in writting his agreement to make payment on draft in stipulated term (make accept). The rules a issue and registration of the bills of exchange are defined by Central bank of the Republic of Uzbekistan together with Ministry of finance of the Republic of Uzbekistan. At presence at drawee debtedness for the budget under taxes and other obligatory payments he redeems the bill exclusively at receiving of money resources and after finishing of accounts with the budget and the rest sum he can use for other accounts. Article 8-1. Securities' derivatives (Article 8-1 is introduced by the Law of the Republic of Uzbekistan of December 22, 1995)

6 Securities' derivatives are securities, income (losses) of which depends on estimation of one or several factors (indexes). Securities' derivatives can be issued as options, futures and other finance tools. Options is agreement giving the right to its owner to acquire securities or goods at stipulated in the contract price in stipulated term. Futures is security (contract) certifying unconditional obligation for purchase or sale of some securities and others finance tools or goods at the stipulated in the contract price for stipulated date. The procedure of issue and circulation of securities' derivatives is determined by the State commission on securities and stock exchange under the Ministry of finance of the Republic of Uzbekistan. CHAPTER II. STATE REGISTRATION, ISSUE OF SECURITY PAPERS Article 9. The circulation of securities The circulation of securities is understood as their purchase and sale, as well as other actions, stipulated by legislation of the Republic of Uzbekistan, leading to shift of the owner of securities. The rules of issue of securities (except the deposit certificates and bills exchange) on a territory of the Republic of Uzbekistan and their registration are approved by the State commission on securities and stock exchange under the Ministry of finance of the Republic of Uzbekistan. The State committee of the Republic of Uzbekistan on management of state property and support of entrepreneurship or its territorial bodies carries out state registration of primary issue of shares of joint-stock companies of an open type, established by the way of reformation of state enterprises, and also provide allocation of shares in established order. (Introduced by the Law of the Republic of Uzbekistan of December 22, 1995) To issue and circulation on a territory of the Republic of Uzbekistan are admitted only those securities, which have passed state registration and have received when due hereunder registration number. The issue of securities, not past state registration, is illegal, entails withdrawal at the owner of securities and proceeds from their sale and returning to the its investors in view of indemnification of overlooked profit. Purchase of more than twenty per cent of a bank's shares, by one or several buyers related between each other by an agreement, and also by a group of legal persons being subsidiaries or dependent relating to each other, requires prior consent of the Central bank. At finding out of unsatisfactory finance situation of a buyer of shares the Central bank has the right to refuse in consent for the deal to buy-sell more than twenty per cent of a bank's shares. Not later than thirty days since the moment of receiving the application the Central bank shall inform the applicant about its decision in writing. (Introduced by the Law of April 26, 1996) The purchase 35 or more than percents of the shares of any emitter or shares, of percents ensuring more by 50 of votes of the shareholders, one person or group of the persons, supervising property one another, requires the preliminary consent of a body, authorized to execute a antiexclusive policy of the Republic of Uzbekistan. The infringement of the given requirement is the basis for a recognition of the bargains void. The body, authorized to execute a antiexclusive policy of the Republic of Uzbekistan, defines the order and rules of a recognition of the subjects supervising by the property one another. Securities can be trusted by their owners on storage in specialized establishments, possessing computer telecommunication system for their non-cash record-keeping and realization (depository). The Cabinet of the Ministers of the Republic of Uzbekistan establishes the general rules, annual quotas and order of the admission in the circulation on a territory of the Republic of

7 Uzbekistan of securities, issued by emitters, located outside the Republic. The Cabinet of the Ministers of the Republic of Uzbekistan have the right to establish the annual quotas and order of the admission to the circulation outside of a territory of the Republic of Uzbekistan of securities, issued or prospective to issue by the emitters, located under jurisdiction of Republic of Uzbekistan, in view of the obligations of the Republic of Uzbekistan under the interstate agreements. The State commission on securities and stock exchange under the Ministry of finance of the Republic of Uzbekistan conducts the Uniform state register of securities registered in the Republic and regularly publishes their list. Article 10. Emission of security papers Emission of securities - issue of securities in the circulation by sale to the their first owners (investors) - legal and natural persons. The emission is executed: - at establishment of joint-stock company and accommodation of the shares among his founders; - at a increase of the sizes of the initial authorized capital (fund) joint-stock company by a way a issue of the shares; - at attraction of the extra capital by the legal persons, state, bodies of a state authority and management of way a issue of the bonds and other liabilities; - at mutual common republican settlement of debt obligations of enterprises. (Introduced by the Law of the Republic of Uzbekistan of December 22, 1995) Article 11. The information on emission The emitter a issue, as well as investment institutes, made under the agreement with emitter sale of securities of their first owners, are obliged to ensure to each buyer a opportunity of acquainting with conditions of sale and prospectus of emission up to a moment of a purchasing of these papers. The prospectus of emission contains data on the emitter, offered to sale of securities, procedure and order of their issue and other information, which can affect the decision on a purchasing of these securities or about failure of such purchase. Order a issue of the prospectus of emission, its registration, as well as list of the items of information, obligatory for the publication in the prospectus of emission, are established by Ministry of finance of the Republic of Uzbekistan. For banks the list of the items of information, contained in prospectuses of emission, is defined by the State commission on securities and stock exchange under the Ministry of finance of the Republic of Uzbekistan as agreed with Central bank of the Republic of Uzbekistan. At reformation of state enterprises in joint stock companies of an open type the assertion of emission project is carried out by the State committee of the Republic of Uzbekistan on management of state property and support of entrepreneurship together with the State commission on securities and stock exchange under the Ministry of finance of the Republic of Uzbekistan. (As amended by the Law of the Republic of Uzbekistan of December 22, 1995) The prospectus of emission of securities, offered for opened subscription, is represented by the emitter to the State commission on securities and stock exchange under the Ministry of finance, recording by the securities, and after registration is subject to compulsory publication in a seal, as well as special edition of stock exchange not less, than for 10 days prior to the beginning subscription on these securities. In case origin of any changes in the information on issue of the shares, bonds of the enterprises, offered for opened sale, the emitter of securities should publish the information on occurred changes prior to the beginning of subscription on these securities. (As amended by the Law of the Republic of Uzbekistan of December 22, 1995)

8 The State commission on securities and stock exchange under the Ministry of finance has the right in case of detection doubtful data in published to the to information on issue of the shares, bonds of the enterprises to suspend their accommodation up to that time, while the emitter of these securities will not introduce to it respective alterations. The responsibility for reliability of the items of information in the prospectus of emission, presented for registration of emission, is born by emitter. (As amended by the Law of the Republic of Uzbekistan of December 22, 1995) Advertising of securities in mass media before registration of the prospectuses of emission about their issue is forbidden. Article 12. The information on activity of the emitter The emitter is obliged not less once in a year to inform a public on economy-financial condition and results of activity (hereinafter - annual report). The annual report is published not later on April 1 year following to accounting and is directed to the holders of registered stocks and the State commission on securities and stock exchange under the Ministry of finance of the republic of Uzbekistan. The annual report should contain following data on the emitter: (As amended by the Law of the Republic of Uzbekistan of December 22, 1995) information on results of managing in the previous year; - the items of information certified by auditor on a financial condition, as well as balances in the previous year and report of the auditor; - the main items of information on in addition issued securities; - substantion of changes in a personal structure of the officials. The emitter is obliged during two days to direct to the State commission on securities and stock exchange under the Ministry of finance of the Republic of Uzbekistan, as well as to publish the information on changes, occurred in his economic activity and of securities influencing on cost or sizes of the of income on it, namely: (As amended by the Law of the Republic of Uzbekistan of December 22, 1995) changes of the rights on the securities ; - changes in a personal structure of the officials; - arrest of the bank accounts of the emitter; - the beginning of actions on sanitation (realization of complex of measures, directed on sanitation of a financial condition of the emitter); - reorganization, stay or discontinuance of activity of the emitter; - destruction not less than 10 percents of the property of the emitter owing to force majeure; - prosecuting to the emitter in the size, exceeding by 10 percents of the property of the emitter; - reception of the credit or emission of securities in the size, exceeding by 50 percents of a authorized capital or sum of the cost of main and turnover means of the emitter. If the shares of the emitter are quoted on stock exchange, he is obliged in specified terms to present it the such information. The emitter in connection with publication of the doubtful items of information about him, which can affect the cost of securities or size of the income on it, is obliged during five working days to take measures on correction of these items of information. Article 13. Kinds of emission The issue of securities (emission) can be executed in following kinds: - private accommodation without the public announcement, without realization of advertising campaign, publication and registration of the prospectus of mission among beforehand known limited number of the investors;

9 - opened sale with the publication and registration of the prospectus of issue among potential of not limited number of the investors. For each of listed cases the State commission on securities and stock exchange under the Ministry of finance of the Republic of Uzbekistan establishes the minimum and maximum sizes of emission. (As amended by the Law of the Republic of Uzbekistan of December 22, 1995) Article 14. The stamp tax and state duty (Article 14 as amended by the Law of the Republic of Uzbekistan of December 22, 1995) At registration the issue project of securities emitter pays stamp tax to the republican budget in size of 0,1 percent of nominal price of emission. At transformation of state enterprises in joint stock companies collection for registration of the project of primary emission is not levied. Article 15. Distribution of security papers The emitters have the right to realize securities independently, for a commission through banks, investment companies, financial brokers. The investment companies can under the agreement with the emitter act by the guarantors and organizers a issue of securities on the following terms: - repayment at own expense whole a issue of securities on the fixed price with the purpose of further resale to the other investors; - repayment at own expense incomplete allocate by them among the outside investors during established term of a part a issue of securities. The investment companies and the financial brokers can conclude the distributive contracts with the emitters about sale of securities on behalf of the emitter to the outside investors without acceptance on self of the obligations under the repayment of incomplete prevalent a part a issue. Article 16. The participants of the market of security papers (Article 16 as amended by the Law of August 30, 1996) Participants of securities market are emmiters of securities, investors, investment institutions, and also their unions (associations), stock exchanges (stock departments of exchanges), authorized by state bodies for management and coordination of securities market and others. (As amended by the Law of August 30, 1996) Emitter of securities - legal person or state body, issuing the securities and bearing on its own behalf by obligations on it before the owners of securities. Investor - natural or legal person, purchasing by the securities from own behalf and at own expense. The foreign citizens and legal persons can act in the market of securities in the Republic of Uzbekistan as the investors pursuant to the legislation of the Republic of Uzbekistan on the foreign investments. Investment institute - created pursuant to the legislation of the Republic of Uzbekistan the legal person, which executes activity with securities as main. CHAPTER III. STOCK EXCHANGE Article 17. Concept of stock exchange The stock exchange - organization, exclusive subject of activity of which is maintenance of necessary conditions of the normal circulation of securities, determination of their market

10 prices (prices, reflecting balance between supply and demand on securities) and proper distribution of the information about them, maintenance of a high level professionalism of the participants of the market of securities. The stock exchange in activity is guided by the legislation of the Republic of Uzbekistan, statute of exchange and internal rules of realization of operations with securities. Article 18. Registration of stock exchanges The stock exchange (share department of commodity-share or currency exchange) is registered pursuant to the legislation of the Republic of Uzbekistan and obtains a license on management of exchange activity with securities in the State commission on securities and stock exchange under the Ministry of finance of the Republic of Uzbekistan. The organization, not received licences on management of exchange activity with securities, have no right to execute such activity. (As amended by the Law of the republic of Uzbekistan of December 22, 1995) On commodity-share and currency exchanges share departments as independent and not independent of structural divisions can be created. The share departments are guided by in activity the all requirements, laid to stock exchanges. Article 19. The founders and members of stock exchange By the founders of stock exchange can act legal and natural persons, possessing by the sanction (license) on the right of realization of operations with securities. The members of stock exchange (share department of commodity -share or currency exchange) can be legal and natural persons, including foreign, which have acquired on exchange a broker place. The quantity of the members of stock exchange is adjusted by management bodies of exchange. The members of stock exchange have no rights to be bodies of a state authority and management, prosecuting magistracy and court, their officials and experts. The admission of the members of stock exchange to tenders is executed only at availability at them of the license for operation with securities and purchase by them of the status of investment institute. A physical person, purchased broker place and received diploma for execution of operations with securities, can be allowed to tenders only after registration him in bodies of a state authority on places and opening of a settlement account in bank.(as amended by the Law of the Republic of Uzbekistan of December 22, 1995) Specialists of the security market shall have qualified sertificate for the right to carry out operation with securities. The term of qualification sertificate validity is three year. (Is introduced by the Law of the Republic of Uzbekistan of December 22, 1995) Article 20. Rules of exchange transactions The rules of exchange transactions with securities are approved by the supreme body of management of exchange. The rules should provide: - principles of trade with securities on this exchange; - structure of the participants of exchange tenders and set of the requirements laid to them; - the information on a place and time of exchange assemblies; - order of the admission of securities to exchange tenders; - the characteristic of the exchange bargains; - kinds of the assignments (orders) customers to the brokers; - organization of tenders;

11 - order of registration the bargains; - the models of operations used at realization with securities of the forms of the agreements, reports, applications, notices and other exchange documentation. Article 21. The order of fulfilment of the bargains The stock exchange independently produces and approves the order of fulfilment of the bargains during exchange tenders, verification and accounts under the made bargains. The stock exchanges and share departments act on the basis of situations, internal rules of fulfilment of the bargains with securities, statute (rule about share department), agreed with the State commission on securities and stock exchange under the Ministry of finance of the Republic of Uzbekistan. The operations on stock exchange can be executed only by her members.(as amended by the Law of the Republic of Uzbekistan of December 22, 1995) Article 22. Rights of stock exchange The stock exchange have the right: - to establish the minimum compulsory requirements to investment institutes, necessary for the introduction in the members of exchange; - to define the qualifying requirements to the representatives of the members on exchange tenders; - to convoke and to organize exchange assemblies; - to set up expert, qualifying and quotable commission, consulting and enquiry office and other establishments, necessary for their work, as well as disputed commissions for the resolution of disputes on operations with securities ; - to establish and to levy, according to statute, introductory and current contributions from the members of exchange, payment for registration of the bargains, technical services, visiting of exchange by the constant and single visitors, as well as to collect the penalties and fine for infringement of the statute, rules of exchange assemblies and untimely payment of a admission fee; - to issue the exchange booklets, directories, collections; - to appeal in the judicial order against wrongful actions of supervising bodies. Article 23. Financing of activity of stock exchange The financing of activity of stock exchange can be executed for the expense: - realization of the shares and interests of stock exchange; - realization of broker places of stock exchange; - the regular member contributions of the members of stock exchange; - the taxes from registration of the exchange bargains; - commissions for intermediary in operations with securities ; - the incomes of information and other services, stipulated by statute of exchange. Article 24. The discontinuance of activity of stock exchange The activity of stock exchange ceases: - under the decision of general meeting of the founders; - on the basis of the decision of judicial bodies; - in other cases provided by the legislation (The last indention was introduced in accordance with the Law of )

12 CHAPTER IV. FINAL PROVISIONS Article 25. Organization of the control at operations with security papers The responsibility under the obligations of the emitters securities is born by emitters. The State commission on securities and stock exchange under the Ministry of finance of the Republic of Uzbekistan nominates representative on stock exchange, authorized to execute supervision for maintenance during exchange activity of the requirements and statute of exchange and possessing right to be present on meetings (assemblies) management bodies of exchange and tenders. The State commission on securities and stock exchange under the Ministry of finance of the Republic of Uzbekistan in case of infringement of the legislation, can apply measures according to the current legislation.(as amended by the Law of the Republic of Uzbekistan of December 22, 1995) Article 26. The appeal of wrongful actions and decisions of a body of state management and other body The wrongful actions and decision of a body of state management and other body, concerning by a issue and circulation of valuable papers, can be appealed against in the judicial order. Article 27. The international contracts If the international contract of the Republic of Uzbekistan establishes other rules, than those, which are contained in the legislation of the Republic of Uzbekistan on currency papers and stock exchange, the rules of the international contract are applied. The President Republic of Uzbekistan I. KARIMOV Tashkent, September 2, No.918-XII