УКАЗ ПРЕЗИДЕНТА РЕСПУБЛИКИ БЕЛАРУСЬ

(Unofficial translation)

 

Edict of the President of the Republic of Belarus
No 277 of April 28, 2006
[Amended as of July 18, 2016]

On Some Matters of Regulation of the Securities Market

 

With a view of strengthening the state regulation of the securities market and perfection of legislation concerning its functioning:

1. To establish that:

1.1. the procedure of emission (issuance), circulation and redemption of securities is determined:

by the Council of Ministers of the Republic of Belarus – for all kinds of securities including peculiarities of emission (issuance), circulation and redemption of securities of local executive and administrative bodies, with the exception of securities of the National Bank, the bearer saving-bank book, cheques, certificates of deposit and saving certificates;

by the National Bank, in coordination with   the republic body of state administration carrying out the state regulation of the security market – for the securities of the National Bank, the bearer saving-bank book, cheques, certificates of deposit and saving certificates;

1.2. the republic body of state administration carrying out the state regulation of the security market or , unless otherwise is established by legislative acts, its authorized structural division carrying out executive, controlling, coordinating and regulating functions in the part of the state regulation of the security market, carrying out control over and supervision of the emission (issuance), circulation and redemption of securities, activity of professional participants of the securities market (hereinafter – the authorized structural division of the republic body of state administration carrying out the state regulation of the security market) suspend performance and/or execution of transactions with securities in the trading system of the organizer of trade with securities and/or circulation of securities in non-organized marked by means of issuing a binding proposal on suspension of trading with a certain issue of securities or with all securities of the issuer or on suspension of circulation of securities of a certain issue or of all securities of the issuer:

in the case of recognition in the order established by the legislation of the emission of issuable securities as not in good faith, of an issue (additional issue) of issuable securities as invalid, and also suspension or prohibition of the emission of issuable securities;

in the case of violation of requirements on ensuring fulfilment of obligations of the issuer on bonds, established in sub-clause 1.7 of this clause, of the order of substitution by the issuer of the collateral of fulfilment of his obligations on bonds;

in the case of committing actions (omission) specified in part one of Article 63 of the Law of the Republic of Belarus of January 5, 2015 "On the securities market", detection of other violations of the legislation on securities, when carrying out control over and supervision of the emission (issuance), circulation and redemption of issuable securities, activities of the professional participants of the securities market, including when carrying out desk inspections;

in other cases established by the legislative acts of the Republic of Belarus.

The republic body of state administration carrying out the state regulation of the security market or , unless otherwise established by legislative acts, an authorized structural division of the  republic body of state administration carrying out the state regulation of the security market shall suspend performance and/or execution of transactions with securities in the trading system of the organizer of trade with securities and/or circulation of securities in non-organized marked by means of issuing a binding proposal on removal from participation in trading with securities or from participation in circulation of securities of professional participants of securities market:

in the case of committing actions (omission) specified in part one of Article 63 of the Law of the Republic of Belarus "On the securities market", detection of other violations of the legislation on securities, when carrying out control over and supervision of the emission (issuance), circulation and redemption of issuable securities, activities of the professional participants of the securities market, including when carrying out desk inspections;

in other cases established by the legislative acts of the Republic of Belarus.

the republic body of state administration carrying out the state regulation of the security market is entitled to obtain information contained in the register of movable property encumbered by the pledge, on a gratuitous basis and in the order established by the legislative acts;

1.3. the republic unitary enterprise “Republic central depositary of securities” is the central depositary of securities in the Republic of Belarus.

Record keeping of rights to shares being in the ownership of the Republic of Belarus, including in the economic management of republican unitary enterprises, or of its administrative and territorial units, including in the economic management of communal unitary enterprises, is carried out by the central depository of securities of the Republic of Belarus;

1.4. legal persons having the proprietary capital (net assets) equivalent to at least 30 000 base units have the right to carry out depositary activity.

The requirement provided by part one of this sub-clause does not cover banks, non-bank credit and finance organizations and the central depository of securities of the Republic of Belarus;

1.5. legal persons carrying out professional and exchange activities with securities, with the exception of banks, non-bank credit and finance organizations determine the amount of the proprietary capital (net assets) on the first day of each month and submit, in the established order, such data to the republic body of state administration carrying out state regulation of the securities market;

1.6. depository, broker, trustee are entitled to render:

services on placement of information on the single information resources of the securities market to issuers and other persons obliged to disclose information in accordance with the legislation of the Republic of Belarus on securities;

consulting services related to activities on the securities market;

1.7. fulfilment of obligations on the bonds shall be secured by the pledge, and/or by the suretyship, and/or by the bank guarantee, and/or  insurance of liability for non-fulfilment (undue fulfilment) of obligations of the issuer of bonds, and/or by the right to claim on credits provided by banks for construction, reconstruction or purchase of dwelling, with the exception of cases set forth in sub-clauses 1.8 and 1.10 of this clause.

The subject of pledge on the bonds may be state securities (with the exception of nominal privatization cheques "Property"), securities of the National Bank, bonds of local executive and administrative bodies, mortgage bonds, deposit certificates, banks bonds, transportation means (including  road-building, construction and other special-purpose machinery), registered in the territory of the Republic of Belarus (hereinafter – transportation means), immovable property registered in the Unified State Register of Immovable Property, Rights Thereto and Transactions Therewith (hereinafter – immovable property).  In that instance the issuer of bonds is not entitled to transfer securities emitted (issued) by that issuer in the pledge on bonds. Securities, transportation means, immovable property being the subject of the pledge on bonds are subject to assessment in the order established by the legislation. The subsequent pledge of securities, transportation means, immovable property for securing of the fulfilment of obligations on the bonds, unless it is prohibited by preceding contracts on pledge of the mentioned property or unless a mortgage certificate has been issued under a preceding contract on pledge of immovable property (contract on mortgage ), is allowed in the instances:

of conversion of bonds of one issue in bonds of another issue, after the issuer of bonds has obtained the consent of their holders for the conversion;

restructuring of long-term credits received by the issuer of the bonds in bonds provided that the buyer of all bonds of this issue is the bank-creditor;

when the total volume of obligations secured by the pledge of securities and/or and/or immovable property does not exceed 80 percent of their value.

When securities in the non-documentary form are used as a subject of pledge on bonds, then, for registration of encumbrance (restriction) of the rights to such securities by pledge, a copy of the certificate of state registration of the bonds issue shall be submitted to the appropriate depository. The securities in the documentary form may be used as a subject of pledge on bonds only subject to record keeping and storage of such securities in the depositary. In that instance there is no need to conclude a contract of pledge

When registering encumbrance (restriction) by the pledge of the rights to securities being the subject of pledge on bonds, the state registration number of issue of bonds and information that the owners of bonds are pledgeholders shall be indicated as the information about their initial pledgeholder.

If fulfilment of obligations on bonds is secured by the pledge of transportation means, there is no need to conclude a contract of pledge. In that instance the pledge arises from the date of state registration of the issue of bonds.

If immovable property is used as a subject of pledge on the bonds, then, in addition to the documents specified in accordance with the legislation, the copy of the certificate of state registration of the bonds issue shall be submitted to the organization authorized for the state registration of immovable property, rights thereto and transactions therewith, as the document being a ground for the state registration of the mortgage and the contract on mortgage. In that instance the state registration number of the issue of bonds and information that owners of the bonds are the pledgeholders shall be indicated as the data on the pledgeholder. In that instance there is no need to conclude a contract of pledge

If the fulfilment of obligations on the bonds is secured by a bank guarantee, prior to the state registration of the bonds issue, the issuer shall conclude with a legal person of the Republic of Belarus (bank or non-bank credit and finance organization) a contract on issuing the bank guarantee which shall contain an unconditional obligation  on granting the bondholder (beneficiary) a bank guarantee in the event of impossibility of fulfilment by the issuer of the obligations on the bonds and also in other instances stipulated by the contract.

If the fulfilment of obligations on the bonds is secured by a suretyship,  prior to the state registration of the bonds issue, the issuer shall conclude with a legal person of the Republic of Belarus (shurety) a contract on providing the suretyship which shall comply with the decision on issuing the bonds and the offering prospectus of those bonds the fulfilment of obligations on which is secured by the suretyship and contain an unconditional obligation of the surety to fulfil the obligations on the bonds jointly and severally with the issuer of the bonds in the event of impossibility of fulfilment or unduly fulfilment of the said obligations by the issuer. The model form of the contract on granting the suretyship is to be approved by the  republic body of state administration carrying out state regulation of the securities market.

The written form of the contract of suretyship is deemed to be respected, and the contract of suretyship concluded, from the moment of the transfer of obligations being secured by the suretyship to their holders.

If the fulfilment of obligations on the bonds is secured by  insurance of liability for non-fulfilment (undue fulfilment) of obligations of the bonds issue, the bonds issuer shall conclude the insurance contract prior to the state registration of the bond issue;

1.8. emission of bonds, with the exception of exchange bonds, without regard to the provisions stipulated in sub-clause 1.7 of this clause may be carried out in the cases when issuers of such bonds are:

banks, upon obtaining consent of the National Bank and provided that the volume* of issues of such bonds does not exceed the amount of  the bank's regulatory capital. In that instance the placement of those bonds among natural persons is made by the bank when a special permit (license) to carry out banking activities is available, which gives the right to attract monetary funds from natural persons in accounts and/or deposits;

local executive and administrative bodies;

legal persons not having a negative financial result from realization of products, goods (works, services) or a net loss on the date of taking the decision on issuing bonds, and also during two years preceding such a decision (in the instance when the legal person carries out activity less than three years – for the whole period of its activity), provided that the volume of issues of such bonds does not exceed the amount of the proprietary capital (net assets) of the bonds issuer, calculated in accordance with the legislation. In the case if the total volume of issues of such bonds exceeds the amount of the proprietary capital (net assets) of the bonds issuer, the bonds issuer is obliged, not later than two months from the date on which he determined the amount of the  proprietary capital (net assets), to provide a collateral for the sum of such excess in accordance with requirements provided in sub-clause 1.7 of this clause, with the exception of securing liability for non-fulfilment (undue fulfilment) of obligations of the bonds issuer by insurance, or the take measures on redeeming a part of the bonds issue in the amount of the excess arising between the total amount of the volume of issues of unsecured bonds and the amount of the proprietary capital (net assets) of the issuer.

______________________________

* For the purposes of this Edict the volume of a bonds issue is understood to be the sum of nominal values of all bonds of the given issue.

Legal persons specified in indent four of part one of this sub-clause shall determine the amount of  the proprietary capital (net assets) on the first day of each month with submission of such data to the republic body of state administration carrying out the state regulation of the security market in the order established by it;

1.9. for the state registration of bonds, the legal persons, with the exception of local executive and administrative bodies, insurance organizations, banks, non-bank credit-and-finance organizations, the Open Joint-Stock Company “Bank of Development of the Republic of Belarus” shall, in addition to documents provided by the legislation, present a calculation of quotients of current liquidity and of own current assets coverage, made under the procedure established by the legislation on economic insolvency (bankruptcy), for the last day of the month of the quarter preceding the quarter in which the decision about issue of the bonds was taken.

If the values of the current liquidity quotient and/or of own current assets coverage quotient, calculated for the last day of the month of the last quarter preceding the quarter in which the decision about issue of the bonds was taken, is less than the normative values of the quotients approved by the Council of Ministers of the Republic of Belarus in accordance with the legislation on economic insolvency (bankruptcy), the legal persons specified in part one of this sub-clause shall be denied the state registration of the bonds;

1.10. legal persons are entitled to carry out emission of exchange bonds subject to observance of the following conditions:

the value of net assets of the legal person is not less than 100 thousand base units (with the exception of a bank and non-bank credit and financial organization, the normative capital of which is respectively not less than 1 Mln. of base units and not less than 500 thousand base units);

the legal person has not a negative financial result from realization of products, goods (works, services) or a net loss on the date of taking the decision on issuing exchange bonds, and also during two years preceding such a decision (in the instance when the legal person carries out activity less than three years – for the whole period of its activity);

securities of the legal person are accepted for circulation in the trading system of the Open Joint Stock Company "Belarusian Currency and Fund Exchange".

Emission of exchange bonds is carried out without regard to the provisions stipulated in sub-clause 1.7 of this clause.

Recording of rights to exchange bonds and their storage is carried out in the depository system of the Republic of Belarus. Acceptance of issues of exchange bonds for a centralized record-keeping (record-keeping and storage) in the depositary system and assignment of an identification cone to each issue of exchange bonds shall be carried out by the central depository of securities of the Republic of Belarus in the order established by the republic body of state administration carrying out the state regulation of the security market;

1.11. in the case of emission by the legal persons of the Republic of Belarus of bonds outside the Republic of Belarus in accordance with the legislation of foreign states, the issuer shall, within ten-day period from the date of beginning the placement of bonds in the territory of a foreign state, shall submit to the republic body of state administration which carries out state regulation of the securities market a copy of the prospectus of the issue of securities or of a document substituting it in accordance with the legislation of foreign states.

Documents specified in part one of this sub-clause, drawn up outside the Republic of Belarus according to the legislation of foreign states, must be translated in Russian (Byelorussian) (accuracy of the translation or authenticity of the signature of the interpreter must be certified by a notary);

1.12. the banks are entitled to carry out professional and exchange activity concerning securities with bonds of the issuers – legal persons which they are servicing;

1.13. legal and natural persons are entitled to receive confidential information about depositors in the instances provided by this Edict and other legislative acts.

The republic body of state administration carrying out the state regulation of the security market shall provide data constituting confidential information about depositors, received by it in accordance with the legislation, to state bodies and other organizations in the instances provided by legislative acts or treaties of the Republic of Belarus.

The republic body of state administration on management of state property, regional executive committees and the Minsk city executive committee are entitled to receive confidential information about depositors, data entered into the register of security holders, in the part of shares of joint-stock companies with a stake of the state in the statutory fund and also of joint-stock companies specified in part one of sub-clause 1.4 of clause 1 of the Edict of the President of the Republic of Belarus of November 16, 2006 No 677 "On some issues of disposal of the property being in the communal ownership and acquisition of the property into the ownership of administrative and territorial units".

Depositors shall, in the order determined by the republic body of state administration carrying out the state regulation of the security market, submit to the central depository of securities in the Republic of Belarus confidential information about depositors in the part of:

shares of joint-stock companies specified in part three of this sub-clause, for subsequent provision of that information to the republic body of state administration carrying out the state regulation of the security market, regional executive committees and the Minsk city executive committee;

securities of the issuer for subsequent provision of that information to the depository of the issuer upon formation of the register of holders of securities of that issuer.

The use of information specified in this sub-clause shall be carried out in the order established by the legislative acts;

1.14. resolving matters concerning acquisition (alienation) of shares by a joint-stock company of shares of own emission is referred to the exclusive competence of the general meeting of shareholders. In that instance, a decision on acquisition by the joint-stock company of shares of own emission may be taken for purposes of:

subsequent sale or gratuitous transfer of shares of own emission to the state;

subsequent proportional distribution among shareholders without changing the ratio of their stakes in the statutory fund of the joint-stock company. In the case of impossibility of proportional distribution among shareholders of shares of own emission acquired by the joint-stock company without changing the ratio of their stakes in the statutory fund, such share are subject to be annulled;

subsequent sale to an investor on conditions provided by the business plan of the joint-stock company development;

subsequent transfer to a foreign or international legal person (organization not being a legal person) issuing foreign depositary receipts for sale of shares using foreign depository receipts;

annulment;

1.51. pledge of shares of legal persons of the Republic of Belarus shall be carried out without transfer of the rights certified by those securities to the pledgeholder.

It is prohibited to conclude contracts:

of exchange stipulating the transfer of shares of the joint-stock company of the Republic of Belarus, with the exception of instances of exchange of nominal privatization cheques "Property" for shares of open joint-stock companies created in the process of transformation of state unitary enterprises in open joint-stock companies, and also of other instances established by the President of the Republic of Belarus;

of loan stipulating the transfer of the joint-stock company of the Republic of Belarus, with the exception of instances of performance  of margin transactions, transactions for purposes of securing settlements on transactions with securities and also of other instances established by the legislative acts.

Introduction of shares of a close joint-stock company of the Republic of Belarus as a contribution to the statutory fund of a legal person is allowed only after receiving the refusal of other shareholders and the joint-stock company itself to acquire the given shares or non-receipt of consent to their acquisition under the procedure of realization by the shareholders of the priority right to acquire shares (right of the joint-stock company to acquire shares) established in parts one to five and seven of Article 73 of the Law of the Republic of Belarus of December 9, 1992 "On economic companies".

Donation of shares of legal persons of the Republic of Belarus may be carried out only to the Republic of Belarus (its administrative and territorial units) or to persons being parents, children, adoptive parents, adopted children, spouse, parents-in-law, brothers and sisters, grandparents in relation to the donator, unless otherwise established by the President of the Republic of Belarus;

2. [Ineffective]

3. [Not given]

4. The Council of Ministers of the Republic of Belarus and the National Bank shall, within three month period, take measures on implementation of this Edict.

5. The Council of Ministers of the Republic of Belarus shall, within six month period, in accordance with existing procedure, submit to the House of Representatives of the National Assembly of the Republic of Belarus the draft laws of the Republic of Belarus on introducing changes and additions:

in the Code of the Republic of Belarus on Administrative Offenses of April 21, 2003, providing extending of established administrative liability on infringements of the requirements provided in sub-clauses 1.4 and 1.6 of clause 1 of this Edict;

in the Criminal Code of the Republic of Belarus, providing extending of established criminal liability on illegal modification of the register of security holders or destruction of this register by the depositary of the issuer, and for illegal use and dissemination of the information specified in part one of sub-clause 1.6 of clause 1 of this Edict.

6. This Edict enters into force since July 1, 2006, with the exception of sub-clause 1.2 of clause 1, which enters into force from January 1, 2008, clauses 4, 5 and this clause, which enter into force from the day of signing of this Edict.

 

President of the Republic of Belarus

A. Lukashenko

 

* unofficial translation *