УКАЗ ПРЕЗИДЕНТА РЕСПУБЛИКИ БЕЛАРУСЬ

Edict of the President of the Republic of Belarus
No 277 of April 28, 2006
[Amended as of July 21, 2014]

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 issuing, circulation and redemption of securities is determined by:

the Council of Ministers of the Republic of Belarus – for all kinds of securities including 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;

the National Bank, in coordination with the authorized republic body of state administration which is 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;

1.11the republic body of state administration which is carrying out the state regulation of the security market:

 applies to the court with a statement of claim on recognizing a transaction as invalid (establishment of facts of nullity of transactions) and application of consequences of its invalidity in the event of detection of transactions which have signs of nullity in accordance with part 4 of sub-clause 1.6 of this clause and/or mentioned in indents 3 – 8 of part one of sub-clause 1.61 of this clause;

when carrying out control over and supervision of the issuing, circulation and redemption of securities, of activities of professional participants of securities market and stock exchanges, is entitled to perform inspections at the place of its location on the basis of examining documents and information, obtained in accordance with the legislation, without requesting other documents from inspected subject (desk inspections). Upon detection of violation of the legislation as a result of desk inspections, the republic body of state administration which is carrying out the state regulation of the security market shall issue demand (dictation) for their elimination in the form to be approved by this body, with setting out a time limit for the elimination. A written notice about elimination of violations shall be sent to the republic body of state administration which is carrying out the state regulation of the security market by the person in relation to which the demand (dictation) has been issued not later than the day set out by the respective demand (dictation) with enclosure of the documents confirming the elimination of violations;

suspends, in the instances and under the procedure, to be determined by this body, performance and/or execution of transactions with securities in the trading system of the Open Joint-Stock Company "Belarusian Currency and Funds Exchange" through issuing the dictation on suspension of exchange trading with a certain issue of securities or with all securities of the issuer or on removal from participation in exchange trading of legal persons carrying out professional and exchange activities with securities;

sets forth parameters of demand on a security and/or offer of a security, of the market price of the security or of volume of trading with the security the divergence from which as a result of actions mentioned in part one of sub-clause 1.61 of this clause is considered an essential influence on the demand for the security and/or offer of the security, the market price of the security or the volume of trading with the security;

1.2. the Republic Unitary Enterprise “Republic Central Depositary of Securities” is the central depositary of securities in the Republic of Belarus.

The recordkeeping of rights to securities issued by legal persons of the Republic of Belarus, with the exception of shares specified in part three of this sub-clause and bonds the issue and placement of which is carried out outside the Republic of Belarus, is carried out by the depositaries (legal persons – residents and non-residents of the Republic of Belarus) which have established correspondent relations with the central depositary of securities in the Republic of Belarus.

The recordkeeping of rights to shares being in the ownership of the Republic of Belarus, including in the economic management of republican unitary enterprises, and of its administrative and territorial units, including in the economic management of communal unitary enterprises, is carried out by the central depositary of securities in the Republic of Belarus.

The central depositary of securities in the Republic of Belarus, in agreement with the republic body of state administration which carries out state regulation of the securities market and under the procedure and on the conditions to be determined by this body, establishes correspondent relations with legal persons – non-residents which carry out depositary activity and formalize them by the contract on rendering services on recordkeeping of rights to securities the issues of which are being stored by the central depositary of securities in the Republic of Belarus;

1.3. the 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 requirements of part one of this sub-clause are not applicable to the banks, the Open Joint-Stock Company “Belarusian Currency and Stock Exchange” and the Republic Unitary Enterprise “Republican Central Depositary of Securities”.

Legal persons that carry out depositary activity are entitled to:

have in the ownership shares of joint-stock companies with the exception of shares of a joint-stock company with which a contract on rendering services on recordkeeping of rights to securities (hereinafter -- the contract) has been concluded;

upon a special permit (license) to carry out professional and exchange activity on securities, render services to carry out:

activity on trust management of shares of a joint-stock company with which the contract has been concluded;

broker activity in the part of selling by the depositor of shares of the joint-stock company with which the contract has been concluded through the trading system of the Open Joint-Stock Company "Belarus Currency and Funds Exchange";

1.31legal persons that carry out professional and exchange activities with securities, with the exception of banks, determine the amount of the proprietary capital (net assets) on the first day of each month and submit, under the established procedure, such data to the republic body of state administration which carries out state regulation of the securities market;

1.4. legal persons being the issuers of shares are obliged to take measures on providing protection of the data entered to the register of security holders and are entitled to disclose such data only for the audit organizations, auditors carrying out activity as individual auditor (later on – auditors-individual entrepreneurs) rendering audit services to this issuer, or for the state bodies, legal persons or natural persons in cases provided by the legislative acts of the Republic of Belarus, in particular, for the courts (judges) on the cases under their consideration, and also on execution documents, for the public prosecutor (deputy public prosecutor), or, subject to the sanction of the public prosecutor (deputy public prosecutor), for the bodies of inquiry or preliminary investigation on criminal cases being in their charge, for the Committee of State Control and its bodies, for the tax bodies, for the notaries - for fulfilment of notarial acts, and for the republic body of state administration carrying out the state regulation of the security market.

The persons (including the officials of state bodies and other state organizations) indicated in part one of this sub-clause, as well as persons which make part of collegial bodies of management and control of the issuer, and other persons which have (had), ex officio or in virtue of labour relations or a civil-law contract, the access to the data entered into the register of securities holders are not entitled to transfer such data to third persons, with the exception of the cases stipulated by acts of legislation, or use them otherwise for the own purposes.

The legal persons being issuers of shares are obliged to work with the register of securities holders in accordance with the rules of procedure approved by these legal persons with regard to requirements determined by the republic body of state administration which carry out the state regulation of the securities market;

1.41Legal persons that carry out depositary activity shall submit confidential information on depositors in the part of their securities encumbered by pledge obligations to the Republic Unitary Enterprise “Republican Central Depositary of Securities” for subsequent submission of this information within the integrated information resource about the property the rights to which are encumbered by pledge obligations to banks, non-bank credit and finance institutions and leasing organizations under the procedure to be determined by the Council of Ministers of the Republic of Belarus.

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

1.42. legal and natural persons are entitled to obtain confidential information on depositors in the cases provided by this Edict and other legislative acts.

The republican body of state administration for managing state property, regional and the Minks City executive committees are entitled to obtain confidential information on depositors in the part of shares of joint-stock companies with a portion of state ownership in the statutory fund, and also shares of  joint-stock companies defined in part one of sub-clause 1.4 of Edict of the President of the Republic of Belarus of November 15, 2006 No 677 “On certain issues of disposal of the property being in the communal ownership and on acquiring the property into the ownership of administrative and territorial units”.

Legal persons that carry out depositary activity provide confidential information on depositors in the part of shares of joint-stock companies indicated in part two of this sub-clause to the central depositary of securities in the Republic of Belarus for subsequent providing this information to the republican body of state administration for managing state property, regional and the Minks City executive committees under the procedure to be determined by the republican body of state administration for managing state property that carries out state regulation of the securities market.

The use of information specified in parts one and two of this sub-clause shall be carried out under the procedure established by the legislative acts;

1.5. resolving of matters concerning acquisition (alienation) of shares by the issuer of these shares is included in the exclusive competence of the general meeting of shareholders. The respective decision may be made for the purposes of:

subsequent sale or gratuitous transfer to the state;

subsequent proportional distribution among shareholders;

subsequent sale to the investor on conditions provided by the business plan of the issuer;

annulment;

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

The conclusion of swap contracts which stipulate the transfer of shares of an open joint-stock company of the Republic of Belarus, admitted to circulation in the trading system of the Open Joint-Stock Company "Belarusian Currency and Funds Exchange" is prohibited.

The conclusion of swap contracts which stipulate the transfer of shares of a closed joint-stock company of the Republic of Belarus is allowed after receipt of refusal of other shareholders and the company itself from purchasing these shares or failure to obtain the consent to their purchase under the procedure for realization by shareholder of the priority right to purchase the shares (the right of the company to purchase the shares) set forth in part 1 – 5 and 7 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;

1.6. Information on results of financial and economic activity of the issuer, prior to its publication in mass media or to bringing to knowledge of unlimited set of persons otherwise, is deemed to be restricted information in the securities market.

The persons, for which the information specified in part one of this sub-clause is available, are:

executives of the issuer, and persons being the members of the collective managing or control bodies of the issuer;

employees of audit organizations (auditors-individual entrepreneurs), auditors-individual entrepreneurs rendering the audit services to the issuer;

other persons having access to such information because of the official status, labour duties or civil-law contract.

The persons for which the issuer’s information specified in part one of this sub-clause is available do not have a right to alienate the securities of this issuer within six months from the day of purchase of these securities; and also to disclose such information to third persons.

Securities transactions performed with abuse of the office and/or confidential information about the depositor or with infringement of requirements specified in this sub­-clause are null and void;

1.61. the following actions (omissions) exercising influence on the demand for the security and/or offer of the security, the market price of the security or the volume of trading with the security, deemed to be essential when deviating from the parameters set forth by the republic body of state administration that carries out the state regulation of the securities market are prohibited and deemed to be manipulation of the securities market entailing liability in accordance with the legislative acts:

intentional dissemination by natural and/or legal persons through mass media, including through the global computer network Internet, or otherwise of knowingly false data about securities, issuers of securities, prices for such securities, including the information presented in advertisements;

systematic (twice and more within 12 consecutive months) failure to fulfil obligations (with the exception of instances of termination of obligations on grounds provided by acts of legislation and/or exchange trading rules) on transactions concluded in the trading system of the Open Joint-Stock Company "Belarusian Currency and Funds Exchange" with the same shares;

performance by a legal person carrying out professional and exchange activities with securities, in the course of one trading day, of two and more transactions with securities for account or on behalf of one person on the basis of orders having at the moment of their placement the highest bid price and the least ask price of securities;

performance of transactions with securities, by previous concert between legal persons carrying out professional and exchange activities with securities and/or between their employees, and/or between persons for account or on behalf of which the said transactions are performed;

performance by a legal person carrying out professional and exchange activities with securities, in the course of one trading day, for account or on behalf of one person:

of two and more transactions with the same shares, the execution of obligations on which does not entail the change of the shareholder;

of two and more transactions with the same shares under which the parties alternatively act first as sellers then as buyers.

The actions indicated in indents 4 – 8 of part one of this sub-clause performed for the benefit of the issues in the course of primary issue of his shares are not considered manipulation of the securities market;

1.7. fulfilment of obligations on the bonds shall be secured by the pledge, or/and by the suretyship, or/and by the bank guarantee, or/and the contract on insurance of liability for non-fulfilment (undue fulfilment) of obligations of the issuer of bonds, or/and 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, 1.10 and 1.11 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 under the established procedure (hereinafter – transportation means), immovable property registered in the Unified State Register of Immovable Property, Rights Thereto and Transactions Therewith (hereinafter – immovable property). The issuer of the bonds is not entitled to transfer other securities issued by that issuer in the pledge on bonds. Securities, transportation means, immovable property being the subject of the pledge on the bonds are subject to assessment under the procedure established by acts of 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 or unless a mortgage certificate has been issued under a preceding contract of pledge of immovable property (mortgage contract), is allowed in the instances:

 of conversion of bonds of one issue in bonds of another issue, after the issuer has obtained the consent of bond 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 obligation secured by the pledge securities and/or transportation means, 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 the bonds, then, for registration of arising of rights to these securities and encumbrance (restriction) of the rights to such securities by pledge, the 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 the bonds only if these securities are kept in the depositary. In this instance the contract of pledge between the issuer and the securities holder needs not be concluded.

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

When registering encumbrance (restriction) by the pledge of transportation means being the subject of pledge on the bonds, the state registration number of issue of these bonds, and the note indicating that the owners of such bonds are the holders of such obligations shall be indicated as the information about their initial pledgeholder. In this instance the contract of pledge between the issuer and the securities holder needs not be concluded.

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 mortgage contract. In this instance the state registration number of the issue of the bonds and the note indicating that owners of the bonds are the pledgeholders shall be indicated as the information about the initial pledgeholder. In this instance the contract of pledge between the issuer and the securities holder needs not be concluded.

If the fulfilment of obligations on the bonds is secured by a bank guarantee, then, 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 to give the bondholder (beneficiary) the 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, then, 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 providing the suretyship which shall comply with the decision on issuing the bonds and/or with the offering prospectus of these 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 providing the suretyship is to be approved by the Council of Ministers of the Republic of Belarus.

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 a contract on insurance of liability for non-fulfilment (undue fulfilment) of obligations of the bonds issue, then the bonds issuer shall conclude the insurance contract prior to the state registration of the bond issue.

The fulfilment of obligations on the bonds must be secured in the course of the full term of circulation of the obligations and also within three months after the termination of the term of circulation of the bonds of this issue, with the exception of cases of fulfilment of obligations on the bonds in full prior to the expiry of the mentioned three-month term. The procedure for substitution by the issuer of the security for the fulfillment of his obligations on the bonds is to be set forth by the Council of Ministers of the Republic of Belarus with regard to requirements provided by the legislative acts;

1.8. the issue of bonds by banks, without having regard to provisions stipulated in sub-clause 1.7 of this clause, may be carried out in agreement with the National Bank and provided that the total amount of obligations under such bonds will not exceed 80 percent of the normative capital.

The placement of bonds mentioned in part one of this sub-clause 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 deposits;

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

1.10. the issue of bonds by legal persons shall be effected from the date of state registration of the issue by the republic body of state administration carrying out the state regulation of the securities market, with the exception of the bonds the issue and placement of which is effectuated outside the Republic of Belarus and also of the bonds specified in part four of this sub-clause.

To effectuate 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 CompanyBank of Development of the Republic of Belarusshall, 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 preceding the quarter in which the decision about issue of the bonds was taken, and also accounting reports for the last reporting year and the quarter preceding the quarter in which in which the decision about issue of the bonds was taken.

If the value of the current liquidity quotient and/or of own current assets coverage quotient, calculated for the last day of the month 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 indicated in part two of this sub-clause shall be denied the state registration of the bonds.

The bonds denominated in Belarusian rubles, issued in a non-documentary form, with the circulating period not more than two years, the placement and circulation of which is carried out only through the trading system of the Open Joint Stock Company "Belarusian Currency and Fund Exchange" constitute exchange bonds.

The exchange bonds are registered by the said joint stock company in the order determined by the Council of Ministers of the Republic of Belarus. The issue of exchange bonds is effected without the registration of the prospectus of the issue and certification of the short information about the open selling by the republic body of state administration carrying out the state regulation of the securities market, without submission of a report on the results of selling of such bonds to the said state administration body, and without having regard to the provisions stipulated in sub-clause 1.7 of this clause.

The exchange bonds are issued by legal persons, provided that the following conditions are observed:

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. 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".

Recording of rights to exchange bonds and their storage is carried out in the depository system of the Republic of Belarus. The acceptance of issues of exchange bonds for storage in the depository system and assignment of an identification code to each issue of exchange bonds are performed by the Republican Unitary Enterprise "Republican Central Securities Depository;

1.11. local executive and administrative bodies are entitled to effectuate the issuance of bonds without regard to dispositions provided in sub-clause 1. 7 of this clause;

1.12. [ineffective]

1.13. when legal persons of the Republic of Belarus issue bonds the issue and placement of which is effected outside the Republic of Belarus in accordance with the legislation of foreign states, the issuer shall, within 10 day period from the date of beginning of placement of the 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;

1.14. it is prohibited to use means attracted through the issue of bonds of legal persons of the Republic of Belarus for the purposes not indicated in the decision about the issue and/or the prospectus of the issue of these bonds and also to provide loans to other legal and natural persons at the expense of the mentioned means;

Bonds purchased in the course of primary placement, with the exception of bonds the issuance and placement of which are effectuated outside the Republic of Belarus and also of bonds indicated in part four of sub-clause 1.10 of this clause, may not be alienated by the purchaser till they are fully paid for.

2. To impose on the Open Joint-Stock Company “Belarusian Currency and Stock Exchange”, formed in accordance with existing procedure by the decision of the President of the Republic of Belarus, the arrangement of the exchange trade in financial assets, including currency valuables and issuing securities, with the exception of shares of closed joint stock companies.

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 *

 

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