On Securities and Stock Exchanges

The present Law defines the unified procedure for issue and circulation of securities, regulation of activities of professional participants of the stock market, as well as principles of the organization and operation of the stock exchange.

The objective of the present Law is to promote the development of the Republic's stock market through mobilization of financial resources, their redistribution and effective use, as well as establishing legal guarantees for the protection of investors.

The Law establishes the necessary requirements for the persons issuing securities and carrying out professional activities with securities and creates conditions for establishing in the Republic of Belarus the business facilities necessary to make transactions with securities.

Article 1. Basic Terms

1. The issuer of securities - a legal entity which issues securities by its own name and undertakes to meet the commitments resulting from the terms of issue of securities.

2. The investor - an individual or a legal entity possessing securities.

3. The securities (shares and bonds) - documents certifying property rights, expressed in them and realizable by presenting or transferring them, or loan relationships between an owner and an issuer of securities.

Securities can be issued as printed paper forms or as entries in accounts.

When securities circulates as entries in accounts, the owner of securities can realize his property rights in relation to the issuer through specialized organizations, engaged in keeping, accounting and settling transactions with securities.

4. Securities shall be considered as bearer documents in case when it is sufficient to present a security to realize rights of property connected with holding thereof.

Securities shall be considered registered in cases to realize property rights connected with possession of the securities, it is necessary for the issuer to register the holder's name by the issuer or - by the instruction of the former - by an organization, carrying out professional activities with securities. Transfer of a security from one holder to another shall be documented by altering correspondent records in the accountancy.

5. Professional activities with securities - making operations with financial assets recognized as securities or their derivatives owned by third persons in conformity with the legislation of the Republic of Belarus as well as performance of work and services connected with such operations for the purpose of obtaining incomes (save income represented by interest rate or dividend).

Article 2. Legislation on Securities and Stock Exchange

1. Relationship connected with issue and circulation of securities and professional activities of participants of the stock market should be regulated by the present Law and other legislation acts by force in the territory of the Republic of Belarus.

2. The present Law covers activities with the following types of securities:

a) shares in accordance with the definition in Article 3 of the present Law;

b) bonds in accordance with the definition in Article 5 of the present Law.

3. The present Law does not regulate issue and circulation of internal government bonds and other securities issued or secured by the Government of the Republic of Belarus, the National Bank of the Republic of Belarus, as well as of other types of securities and lotteries.

4. The Government of the Republic of Belarus and the National Bank of the Republic of Belarus shall fix quotas and establish procedures to allow circulation in the territory of the Republic of Belarus of securities issued by foreign issuers, as well as quotas and procedures to allow circulation outside the territory of the Republic of Belarus of securities issued by issuers, which are under the jurisdiction of the Republic of Belarus.

Article 3. Basic Features of Shares

1. An ordinary share - a security, certifying the right of the holder for a stake in the property of a joint-stock company in case of its liquidation and entitling him to receive a share of profits of the company as a dividend and to participation in the management of the company (except in cases stipulated by the legislation of the Republic of Belarus).

A preference share - a share entitling its holder to receive a dividend as a financial interest, the right for a share of property in case of liquidation of the company and giving no right to vote in the management of the company.

2. The form of the share must include the following requisite elements:

the name of the security, i.e. "a share", its nominal value and category (registered or bearer’s);

the full name and the legal address of the issuer;

the full name or the personal name of the buyer of the share or a statement that the share is issued to a bearer;

the place and the date of issue, the number of the state registration, the series and ordinal number of the share;

the sample of signature (facsimile) of the authorized persons of the issuer and the list of rights assigned to shareholders.

The above-mentioned requisites shall be kept in the register of shareholders. The procedure of keeping of the register of shareholders shall be determined by the central body controlling and supervising the securities market.

3. All shares issued by a company must be secured by its property.

If no property is available, a preliminary subscription for shares shall be made and the receipts obtained cannot be used before the state registration of the shares.

Article 4. Issue of Shares

1. A decision to issue shares shall be taken by the founders of a company or by a general meeting of shareholders.

2. A decision to issue shares must contain data defined by the central body controlling and supervising the securities market.

Shares are issued when a joint-stock company is organized or when its authorized capital should be increased. Issue of shares by the organized open joint-stock company must include an open subscription, registration of shares and their actual placement on the conditions and the results of the subscription. The procedure for open subscription for the shares of the open joint-stock company which have to be organized defines by the legislation.

3. Shares are issued within the value of the declared authorized capital of the company being formed and should be placed among investors on the conditions and the results of the subscription.

An additional issue of shares in connection with the increase of the authorized capital through subscription is possible only after the complete payment for the shares and their state registration. Decision on the additional issue of shares made by the general meeting of the shareholders on completion of subscription.

Placement of the additional issue of shares of an open joint-stock company can be made only in the form of allocation among the members of the company, an open sale or by the results of the subscription.

4. Subscription for shares or their sale to the first owner at a price below the nominal cost is not allowed. In such case the nominal cost of shares must be expressed only in the national monetary unit. Open sale of an additional issue of shares is exercised on the basis of a contract on purchase or sale when the investor deposits the payment on the bank account of the issuer in a banking institution. The investor is acquired the right of the shareholder after its full payment and the right for its alienation according to the procedure stipulated by the legislation.

Article 5. Basic Features of Bonds

1. A bond - a security, certifying the commitment of the issuer to repay its nominal value to the security owner within a set period of time adding a fixed interest (unless otherwise stipulated by the terms of issue).

Bonds are issued in batches, comprising uniform securities having same nominal values and same terms of issue and repayment.

2. Bonds are issued by economic entities or other legal entities against their property with the consent of the property owner or a body authorized by it.

3. The bond form consist of the following requisite elements:

the name the security, i.e. "a bond";

the full name and the legal address of the bond issuer;

the full name or the personal name of the buyer or a statement that the bond is a bearer bond;

the nominal price;

the interest rate, if such is envisaged;

the procedures, the time of repayment and payment of the interest;

the date of issue;

the state registration number, the series and ordinal number of the bond;

samples of signatures (facsimile) of authorized persons of the issuer and the rights provided by the bond.

Article 6. Decision to Issue the Bonds

1. A decision to issue the bonds is taken by the issuer according to the procedure, stipulated in its charter or any other document that regulates his activities.

2. A joint-stock company can take a decision to issue the bonds only after its shareholders have paid out the full value of all their shares.

3. A decision to issue the bonds must consist of:

the full name and the legal address of the bond issuer;

the authorized capital of the issuer, the loan security terms, the name of the document regulating his economic activities, as well as a list of management officials of the issuer;

data on placement of the already issued securities;

objectives of issuing the bonds;

the type of bonds;

the total emission value and the number of bonds, the nominal values of bonds, the order for paying profits;

where and when resources for the purchase of the bonds are to be paid;

the time period to return the resources in case the bond issue has been rejected;

the procedures for placement of the bonds;

the procedures for paying of the bonds;

other matters related to the bond issue.

Article 7. Payment of Bond Interest

1. Interest on the bonds is paid according to the procedures envisaged by the terms of the bond issue.

2. In case the issuer does not fulfill his obligations to pay the interest and repay the bond nominal value, these sums are recovered by force in accordance with the legislation of the Republic of Belarus.

Article 8. Procedures for Registration of Securities

1. The issuer acquires his right to issue securities from the moment when the securities have been registered and assigned with the state registration number at the central body controlling and supervising the securities market, unless otherwise established by the President of the Republic of Belarus.

Securities by legal entities, who have been properly registered, are subject to registration.

2. Sale of securities is considered open, in case when it has been announced by the issuer or it meets at least one of the followed criteria:

a) securities are intended for placement among individuals and legal entities, which cannot be individually identified in advance;

b) securities are offered for sale for more than a hundred individuals and legal entities.

3. The following documents must be submitted for the registration:

a) an application to register the securities;

b) the decision to issue the securities, compiled in accordance with Articles 4 and 6 of the present Law for the registration of shares and bonds, respectively;

c) a copy of the document confirming the state registration of the issuer;

d) a prospectus of the emission (for the state registration of securities placed through open sale or subscription) ;

d) a document confirming the payment of the state duty.

For the state registration of securities, the central body controlling and supervising the securities market requests, when necessary, a copy of the issuer's charter (constituent contract, for an issuer which operates only on the basis of the constituten contract) in a respective state body which performed the state registration of the issuer.

The rules of registration of the securities issue shall be established by the central body controlling and supervising the securities market.

4. The central body controlling and supervising the securities market is obliged to perform the state registration of securities or to take a motivated decision about the rejection of the state registration of securities within 15 days, and in the case of sending a request to other state bodies, other organizations, within one month from the date of receipt of the documents submitted for the state registration.

Grounds for the rejection of the state registration of securities are:

violation by the issuer of requirements of legislation while making the issue of securities, and also incompliance of conditions of issue and cireculation of securities with the legislation;

incompliance of the documents submittes for the state registration of the securities and the composition of the data contained in them with the requirements of the present Law and other legislation;

inclusion in the documents submitted for the state registration of securities of the data not corresponding to the real situation (unreliable data).

the Rejection in registration may only be motivated by a violation of the established procedure or a discrepancy between submitted and legislation requirements.

A decision about the rejection of state registration of securities may be appealed, within one year from the day of its adoption, to a state body being superior in relation to the body which has taken the said decision or to the economic court.

5. The central body controlling and supervising the securities market keeps the State Register of Securities.

6. State registration of securities, performed in conformity with the present Article, may not be considered as a guarantee of the value of the given securities.

Article 9. Prospectus of Emission

1. Data, stated in the prospectus of emission and published notices on securities, must be truthful and suitable to assess the economic and financial status of the issuer.

2. Data, contained in the prospectus of emission, should not be older than three months by the moment of publication.

3. The following data must be included into the prospectus of emission:

a) the full name and the legal address; the date of foundation; the subject of the issuer's activities; the date and the number of the minutes of the decision to issue securities; the aim of use of financial resources acquired as a result of the emission; the planned emission volume; types of securities and associated rights; for shares: founders and possible rights granted to the holders of preference shares; the number, the nominal value and emission price of securities; the number of series and ordinal numbers; place and date of start and end of sales; data on possible privileges to security holders; the name of the professional participant in the security market (in case the issuer is his client); actions to be taken in case the subscription is above or below the planned level; the way of calculating and the term of profit payment; addresses of places where interest is paid or transactions and depositions are made; other data, the complete list of them being compiled by the central body controlling and supervising the securities market;

b) issuers effective over one year additionally must be provided with:

an auditor-certified accounting balance sheet and an income/loss statement, the number of employees, as well as data on top managing officers; list and results of previous security emissions; security ranging by types; the number of issued shares in hold by top managing officers of the issuer.

4. The prospectus of emission is signed by the issuer and professional participants of the security market, if their services are used when security emission is being prepared.

5. In case of bond emission, besides data as per item 3 of the present Article, the prospectus of emission must contain the following data:

a) the time and order of repayment;

b) the loan security terms.

6. If some legal entity acts as a warrant to fulfill the obligations mentioned in securities, then the prospectus of emission also specify the data relating to such warranty.

7. The prospectus of emission must be published by the issuer as a separate booklet in the amount sufficient to be read by all potential security buyers and be available in places where securities are selling.

8. Securities offered for open sale are allowed to placement after the publication of a short notice about open sale of securities, certified by the central body controlling and supervising the securities market; the above notice must be made a mass media, which can guarantee the provision of the information to the potential investors.

The short published information must contains of basic data about the issuer and the terms of the securities issue, the place, the time and the way to learn a more detailed information (in a prospectus).

9. During placement of securities the issuer must undertake, in case of any changes in the actual state of affairs as compared to the initial prospectus of emission to register of such changes in the central body controlling and supervising the securities market, and informs his subscribers about such changes.

Article 10. Procedures for Prohibiting or Suspending the Issue of Securities

1. The central body controlling and supervising the securities market may prohibit or suspend the issue of securities in the following cases:

a) violation of the existing legislation, instructions and orders of the central body controlling and supervising the securities market;

b) absence of (or) discrepancy between the information stated in the prospectus of emission and the actual state of affairs:

about the financial and economic position of the issuer (losses, profits) over the last two completed fiscal years or from the date of foundation, if this period is less than two years;

about any overdue indebtedness to creditors and into the budget;

about the underpayment of the authorized capital by the moment when the decision was taken on the issue of bonds.

It is not allowed to prohibit the issue of securities motivated by its inexpediency.

2. The central body controlling and supervising the securities market have the right to suspend or prohibit the issue of securities in case when it is realized by violation of the legislation in force, as well as in case when it has been found out that the prospectus of emission submitted for registration contains incorrect data or does not meet other requirements of the present Law, or if in the course of subscription new information has been received to change substantially the terms of issue and demands that the investors be informed.

3. In case the issue of securities has been suspended by the central body controlling and supervising the securities market, the issuer is obliged to remove the violations which caused such suspension, following which the issue can be resumed on a special written permit of the central body controlling and supervising the securities market.

4. If the issuer or founders (in case of the formation of a joint-stock company) consider this ban of the issue securities is ungrounded, they can dispute this decision at the respective court. In this case the issue of securities must be suspended until the court makes its judgement.

Article 11. Report on the Results of the Open Sale of Securities

Not later than six months since the beginning of the open securities sale, the issuer or the person authorized by the founder must submit to the central body controlling and supervising the securities market a report on the results of the issue giving the sum of the securities sold.

Article 12. Circulation of Securities

1. Transactions on the circulation of securities must be made only with participation of a professional participant of the securities market according to the procedure defined by the central body controlling and supervising the securities market. Professional participants of the securities market are making transactions among themselves only through the stock exchange excluding case of sale of shares owned by the State in the process of privatization.

2. The professional participant of the stock market must undertake to the account for every transaction made by him in the national monetary unit.

3. Security index is published in currency units of the Republic of Belarus.

Article 13. Regular Information about the Issuer of Securities

1. The issuer is obliged to inform, at least once a year, the public of the main data of his economic and financial position and of the results of his activities (hereinafter "the annual report of the issuer"). The requirements to the contents of the annual report of the issuer shall be set by the central body controlling and supervising the securities market.

2. The annual report of the issuer is forwarded, not later than within three months since the last day of the fiscal year following the year of account, to shareholders or must be published in two organs of the press of the national level, as well as submitted to the central body controlling and supervising the securities market and to the relevant financial body.

3. The issuer is obliged within two days to forward to the stock exchange, where his securities are quoted, and the central body controlling and supervising the securities market, as well as to publish, stipulated by clause 2 of the present Article, information related to changes in his economic activities affecting the value of securities or incomes brought thereby, if the last annual report did not contain data or references to these changes. The list of such changes mustl be compiled by the central body controlling and supervising the securities market.

Article 14. Types of Professional Activities with Securities

1. The following types of professional activities can be exercised in relation to securities:

a) broker activities with securities;

b) commercial activities with securities;

c) investment fund activities;

d) depository activities;

e) trust activities;

f) activities of specialized registrar (independent register keeper);

g) other types of activities.

2. Broker activities - purchase and sale of securities at the expense and by the instruction of a client.

3. Commercial activities - execution by a professional participant of the securities market of transactions on purchase and sale of stock on his behalf and at his own expense with the commitment to conclude transactions at purchase and sale prices, declared by a given legal entity. Banks have no rights to execute commercial activities on securities of the served issuers.

4. Investment fund activities - the issue of shares to mobilize investors' pecuniary resources and to invest them on behalf of the fund into securities, as well as on bank accounts or on deposits, with all risks related to such investments and deposits being fully borne by shareholders of this fund and being realized by them by means of changing the current price of the fund's shares. The above operations is the exclusive type of activities of the investment fund.

The investment fund can be formed only as a joint-stock company. The fund operation procedure, direct ways of investing the resources mobilized by it, the terms of transactions, the responsibilities of the founders and the mangers they bear in favor of the shareholders of the fund, the procedure to calculate the assets of the fund per one issued share, and other points important to the shareholders mustl be included into the charter of the fund. It is not allowed to use the resources of the fund by violating its charter.

The investment fund can`t direct more than 10 percent of its capital for purchasing securities of one issuer, or to acquire more than 25 percent of securities by one issuer.

The central body controlling and supervising the securities market defines the requirements of financial sufficiency of the investment fund.

5. Depository activities - activities of accounting, making settlements and keeping securities.

Depository may not perform broker’s and commercial activities with securities of the served issuers.

6. Trust activities with securities - activities on management of securities owned by a specific person by the right of ownership when exercised by another person by transferring to him by the owner for a definite period of time of these securities for possession and trusted management.

The person to whom securities are transferred for possession and trusted management operates for remuneration from his own name for the interests of the securities owner or the persons indicated by him.

7. Activities of a specialized registrar (independent register keeper) - the performance of functions of the shareholder register keeper to be performed according to a contract with the issuer.

The specialized register (independent register keeper) may not perform broker’s and commercial activities with securities of issuers whom he services save in cases of primary placement.

8. Other activities - activities interconnected with the above activities and carried out by legal entity, first of all in the field of consulting services on securities.

Article 15. Licensing of the Professional Activities with Securities

Licensing of the professional activities with securities performs by the central body controlling and supervising the securities market and shall include licensing of professional participants of the security market and certification of their personnel.

A license can be granted for several professional activities with securities at a time or for a single activity.

Article 16. Professional Participants in the Securities Market

Professional participants in the security market - legal entity of any form of property, carrying out one or several activities listed in Article 14 and having a license for professional activities with securities. It`s not allowed to carry out professional activities with securities without a license.

Article 17. Qualification and Other Requirements to Professional Participants in the Securities Market

1. The central body controlling and supervising the securities sets qualification and financial requirements for professional participants of the securities market and to their managers and personnel, necessary to obtain a license for carrying out professional activities with securities.

2. A license of the professional participant of the securities market is granted to the legal entities, if they meet the following requirements:

a) their staff includes at least one specialist certified by the central body controlling and supervising the securities market;

b) they are financially sufficient;

c) they carry out professional activities on securities as their exclusive business.

Bank obtains a license of the professional participant of the securities market, if have a specialist in its staff certified by the central body controlling and supervising the securities market.

Article 18. Procedure of Accounting Operations with Securities

The central body controlling and supervising the securities market establish unified standard regulations on operations with securities, as well as on accounting and reporting on such operations so as to ensure unified regulation of professional activities with securities.

Article 19. Restrictions on Professional Activities with Securities

A license for the professional activities with securities to the professional participant can`t be granted or can be withdrawn in cases, when the appealing legal entity appealing for (or having such a license) is:

a) a property owner (partner, shareholder, etc.) of the another legal entity, which is already have a license for carrying out professional activities with securities in the volume exceeding 10 percent of the authorized capital of the latter.

Exception can be made for the professional participant of the securities market, possessing an entire subsidiary (at least 90 percent of its authorized capital);

b) a property owner (partner, shareholder, etc.) of the value exceeding 5 percent of the authorized capital of any other professional participant to the securities market, carrying out commercial activities.

Exception can be made for the professional participant of the securities market, who have obtained a license for carrying out commercial activities with securities. For the latter participants, the upper allowed participation limit shall be 10 percent of authorized capitals of commercial organizations that are professional participants in the securities market.

Article 20. Cancellation and Suspension of a License for Carrying out Professional Activities with Securities

The central body controlling and supervising the securities market can cancel or suspend a license or certificate for carrying out professional activities with securities, if a professional participant in the securities market or his personnel:

a) submit a distorted information in the application for a license or in the reports;

b) violate the requirements and rules for carrying out professional activities with securities, established by the present Law and the central body controlling and supervising the securities market;

c) stops to meet the requirements of financial sufficiency;

d) have previous unrepaid convictions for document forgery or for economic crimes, or the time have not expired for which they were deprived by the court the right to occupy certain positions or to carry out certain activities.

Article 24. Definition and Legal Status of the Stock Exchange

The stock exchange - an organization with the rights of a legal entity, formed to secure for the professional participants in the securities market the necessary conditions for trade with securities, determination of their market rates and their publication for informing all persons concerned, and to regulate the activities of participants to the securities market.

Article 25. Foundation of the Stock Exchange

1. The stock exchange must be formed as an open joint-stock company.

2. The exchange can be founded by individuals or legal entities.

3. Terms of foundation of the exchange must be like that:

a) a joint-stock company must be registered in accordance with the legislation in force and obtain a license for its functions from the central body controlling and supervising the securities market;

b) the charter and regulations of the exchange must envisage that membership in it is possible for every professional participant in the securities market, as well as observance of just competition among the participants in the market, protection of investors against possible manipulations on the part of members and employees of the exchange;

c) members of the exchange must adopt the unified requirements to the qualification of its members, order of making transactions, accounting and reporting rules, approved by the central body controlling and supervising the securities market.

Article 26. Membership of the Stock Exchange

1. Shareholders of the stock exchange, can be its members as professional participants of the securities market.

2. Operations at the stock exchange can be executed only by its members.

3. Members of the stock exchange have equal rights.

4. Bodies of state power and administration, bodies of Procurator's office and judicial bodies, their officials and experts, as well as bodies of public associations pursuing political objectives, and their staff officials have no right to become members of the stock exchange.

5. Banking institutions cannot perform exchange transactions using resources of their depositors.

Article 27. Activities of the Stock Exchange

1. The stock exchange is independent in working out and adopting the procedures for execution of transactions in the trade hall, settlements and accounting of transactions, different rules and other documents related to the activities of the exchange. The central body controlling and supervising the securities market have the right to revoke or recommend to change any internal documents of the exchange, if they contradict the present Law, violate the equality principle for participants to the securities market or present a threat to an investor.

2. The stock exchange can execute activities, aimed at providing additional services to participants of the securities market, such as storage, accounting and settlements with securities, creation of information services, networks, publications and others. The activities of the stock exchange shall not pursue the purpose of obtaining profits.

3. The central body controlling and supervising the securities market have the right to suspend the activity of the exchange or impose a penalty, if the activity of the exchange contradicts to the legislation in force.

4. The stock exchange forms and publish the rules for admittance and quotation of securities at its auctions. Admittance to the auction can be given to securities by only those issuers, who have published annual balance sheets as specified by the present Law (except those issuers, who were formed on the basis of previously operating enterprises).

5. The stock exchange can`t be entitled as a party for the transaction at its own auctions, except the cases of initial floating through the exchange or purchase and sale of its own shares.

6. The stock exchange have no right to carry out an activity with no connection with executing of its basic functions.

Article 28. Termination of the Activities of the Stock Exchange

The activities of the stock exchange were terminated, if:

a) the general conference takes a decision to terminate the activities of the exchange without appointing a successor;

b) the central body controlling and supervising the securities market withdraws the license granted for the activities of the exchange.

Article 29. Requirements to Employees of Organisations That Are Members of the Stock Exchange and to Employees of the Stock Exchange

1. An individual, having a contribution into the authorized capital of the members of the stock exchange, cannot be a manager or an employee of another member to the exchange or an employ of the exchange itself.

2. Employees of the stock exchange, managers and employees of members of the exchange cannot occupy leading positions at the issuer of stock, quoted at the exchange, cannot have legal labor relations with the issuer, or have a share in the authorized fund of the issuer.

3. Employees of the stock exchange cannot use or transfer information about securities, issuers or transactions at the exchange, except information, regularly published; or act on behalf of the exchange or express official opinions beyond their competence.

Article 30. State Stock Exchange Inspectors

1. The central body controlling and supervising the securities market appoints state exchange inspectors as representatives of the inspection of the stock exchange. They are authorized to supervise the observance of the legislation related to the exchange during exchange operation, and have the right to attend conferences of the exchange bodies.

2. The central body controlling and supervising the securities market can take a decision to suspend operations at the stock exchange, and to quote certain securities in cases of violations of the rules of exchange activities arising from the requirements of the present Law.

Article 31. Use of the Designation "Stock Exchange"

1. The joint-stock company, which has obtained a license for the right to carry out exchange auctions with securities from the central body controlling and supervising the securities market, must have the words "stock exchange" in its name.

2. The designation "stock exchange" or such a designation, which includes the expression "stock exchange", can be used in the company's name or for business or regular advertisements only by such organization, which has been founded according to the procedures stipulated in Article 25 of the present Law.

1. If during the time of open sale of securities the issuer corrects the prospectus of emission, then the persons, who have subscribed to (or) purchased securities, can, within 15 days since the publication of the new information, cancel the transaction, if he think that such correction can unfavorably affect the securities rate (cost). In case when the transaction has been cancelled by a buyer, the issuer is liable for compensating the expenses and losses of the investor, related to the subscription to (or) purchase of securities.

2. Is excluded.

Article 33. Compensation for Losses Resulting from Incorrect Information on Securities

During the entire circulation period of securities the issuer is liable to compensate to investors for the losses, resulted of the incorrect information on securities according to Article 13 of the present Law.

Article 34. Requirements to Holders of Huge Blocks of Shares

Any person acquiring more than 5 percent of the total amount of floatable voting shares must, within 5 days from the day of purchase, inform the central body controlling and supervising the securities market, stock exchanges where operations with these shares are made, about this purchase, as well as the issuer. Similar requirements shall apply in cases when this person acquires every additional 5 percent of shares of the given issuer.

Article 35. Shares Owned by Managing Officers of the Issuer

Managers of the enterprise-issuer (including both members of the Supervisory Council and members of the administration), which has issued shares through their open sale, must inform the central body controlling and supervising the securities market, stock exchanges where operations with such shares are made, as well as the board of the enterprise-issuer about shares of the given enterprise they own, and about all their operations with these shares within 5 working days after the day of the operation.

Article 36. The Issuer's Operations with His Shares

The issuers must provide information about operations with their own shares to the central body controlling and supervising the securities market and to the stock exchanges, where operations with these shares are made, if the total value of operations constituted more than 5 percent of the issued shares.

Article 37. Proposals on Purchase of Shares Addressed to All Shareholders

Proposals on purchase of shares addressed to all shareholders, including such proposals from the enterprise-issuer, must be regulated by the rules established by the central body controlling and supervising the securities market. Such proposals must be made at the same price for all shareholders.

Article 38. Compulsory Purchase of Shares

Any person, intending to purchase more than 50 percent of voting shares of the enterprise-issuer, is obliged to make a proposal on purchase of all shares of the given issuer, addressed to all shareholders and to inform about this the central body on antimonopoly policy of the Republic of Belarus or its territorial body.

Article 39. Prohibiting the Unfair Use of Confidential Information

No person, who due to his post has acquired access to confidential information, concerning the issuer or securities and able to influence the market rate of the security, is allowed to use this information for his own benefit or to transfer it to third parties, as well as to advise, on the basis of this information, third parties on securities operations.

Article 40. Restrictions for Operations with Securities for Persons who Have Access to Confidential Information

Citizens, having access to the confidential information concerning enterprises-issuers, as well as members of their families, have the right to acquire securities from these issuers only in case they keep these securities for at least 6 months. This persons are:

a) managers of enterprises-issuers (including members of the Supervisory Council and administration);

b) employees of auditor companies auditing the given enterprise-issuer;

c) managers and staff of the central body controlling and supervising the securities market, staff of state bodies employed by this inspection, as well as employees of the organizations licensed for professional activities with securities.

Article 41. Spreading False Information with the Aim to Change a Security Rate

Legal entities and citizens, spreading false information about the issuer with the aim to obtain benefits from changes of security rates, can be found responsible by an application from the victim party to exact losses in conformity with the legislation in force.

Article 42. Economic Sanctions for Violating the Present Law

1. Incomes obtained through violating the present Law must be exacted into the state budget of the Republic of Belarus less sums to be returned to the investor in case of cancellation of a transaction.

2. Professional participants of the securities market bear property responsibility in favor of the investor for losses caused to him by transactions:

a) with forged securities;

b) with securities by non-existing issuers or certifying possession of non-existing values;

c) with securities not registered by the state;

d) with securities, for which a professional participant of the securities market has no right to possess or command;

e) implying sale of one security to several investors;

f) resulting in violation of the present Law.