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REGULATION
on quotas and order of admission of securities circulation

 

  • I. General provisions
  • II. Order of placement and circulation of non-resident’s securities in the territory of the Republic of Uzbekistan
  • III. Order of placement and circulation of Uzbekistan resident’s securities outside of the territory of the Republic of Uzbekistan
  • IV. Final provisions

I. GENERAL PROVISIONS
1. This Regulation in accordance with Article 13 of the Law of the Republic of Uzbekistan "On Securities Market" sets quotas and defines order of admission placement and circulation order on:

  • on securities issued by non-residents of the Republic of Uzbekistan in the territory of the Republic of Uzbekistan;
  • on securities issued by residents of the Republic of Uzbekistan outside the territory of the Republic of Uzbekistan.
  • This Regulation does not cover cases of acquisition by the State of securities issued by non-residents of the Republic of Uzbekistan.

Features of placement and circulation of securities issued by banks - residents of the Republic of Uzbekistan outside the territory of the Republic of Uzbekistan are established by the legislation.
2. The following basic terms are applied in this Regulation:

  • nominal holder of securities – a depositary registered in the register of securities owners carrying out safekeeping, registration and certification of rights to securities under instructions of other person (the owner of securities or his/her authorized person), while not being the owner of these securities;
  • represented non-resident’s securities - stocks and corporate bonds issued by a non-resident of the Republic of Uzbekistan, the property right to which is certified by a depositary receipt;
  • uzbek depositary receipt (UDR) - a derivative security, which doesn’t have face-value, certificating the property right to certain quantity of represented securities of the non-resident and vesting the right of its owner to demand from its issuer corresponding quantity of represented securities of the non-resident in return for depositary receipt and providing services related to exercising by the depositary receipt owner rights vested by the represented securities of the non-resident;
  • authorized government body - the Center for coordination and development of securities market under the State competition committee of the Republic of Uzbekistan;
  • non-resident’s securities - emissive securities in the form of stocks and corporate bonds issued by a non-resident of the Republic of Uzbekistan;
  • resident’s securities - securities issued by a resident of the Republic of Uzbekistan;
  • Central securities depository (Central depository) - a state depository, which provides a single storage system, recordkeeping of the rights and movements of emissive securities at depo accounts in depositories.
  • 3. Central depository , in the order defined by this Regulation, carries out storage and recordkeeping of rights to:
  • securities of non-residents and UDR, placed and circulating in the territory of the Republic of Uzbekistan;
  • 2 securities of residents placed and circulating outside the territory of the Republic of Uzbekistan.

II. ORDER OF PLACEMENT AND CIRCULATION OF NON-RESIDENT’S SECURITIES IN THE TERRITORY OF THE REPUBLIC OF UZBEKISTAN
4. Placement and circulation of non-resident’s securities in the territory of the Republic of Uzbekistan are allowed in case of simultaneous observance of the following conditions:

  • non-resident’s securities correspond to definitions of the emissive securities types provided by the legislation of the Republic of Uzbekistan;
  • non-resident’s securities have international securities identification number (ISIN) and international code of the Classification of Financial Instruments (CFI);
  • non-resident’s securities have passed listing procedure at a foreign stock exchange of the country of origin of their issuer and are included in the quotation list of this stock exchange;
  • the issuer is an organization founded in the state, being a full member of the International Organization of Securities Commissions and Financial Action Task Force on Money Laundering (FATF), and is a resident of the country in which there are diplomatic representations of the Republic of Uzbekistan;
  • the issuer is not an organization founded in a state and (or) a territory granting preferred treatment and (or) not demanding disclosure and providing of information at execution financial operations (offshore zones);
  • the issuer is not a financial organization according to the legislation of the country of origin of this issuer or the issuer is not considered as a financial organization according to the legislation of the Republic of Uzbekistan;
  • term of the issuer’s activity is not less than ten years from the date of its foundation;
  • the issuer must have positive indicators of profitability, solvency, financial stability and liquidity for the last three years confirmed by an audit report, and must have an independent rating of international rating agencies;
  • presence of a contract on issue of UDR between Central depository, the issuer and a foreign depository carrying out recordkeeping of the rights to represented non-resident’s securities .

5. Non-resident’s securities are allowed to placement in the territory of the Republic of Uzbekistan in the volume not exceeding 25 percent of total amount of issued securities of the given type (category, class), by the way of issue of UDR presenting these securities. UDR is subject to state registration by the authorized government body.
The issuer of UDR may be Central depository.
6. UDR may be placed and circulate at a stock exchange without passing listing procedure, in the order defined by this Regulation and stock exchange rules.
7. UDR of one issue can certify the property right to represented securities of one issuer and one type (category, class) only, as well as with identical rights to represented securities and terms of their issue.
8. Procedure of UDR issue includes following stages:

  • acceptance and approval of the decision on UDR issue;
  • state registration of UDR issue with assignment of identification number;
  • placement of UDR.

9. Decision of Central depository on UDR issue must specify:

  • 1) full name of Central depository, bank details, its location and postal address, as well as its official website and e-mail;
  • 2) date of acceptance and approval of the decision on UDR issue;
  • 3) name and location of the issuer of represented non-resident’s securities , as well as other information allowing to identify it as a legal person;
  • 4) properly certified copies of constituent instruments of the issuer of non-resident’s securities;
  • 5) contact information of the issuer of non-resident’s securities , its postal address and e-mail, as well as its official website;
  • 6) brief information about the executive manager (head) of the issuer of non-resident’s securities , including his/her full name, citizenship, contact information;
  • 7) type, category (class) of represented non-resident’s securities;
  • 8) rights and obligations provided by represented non-resident’s securities;
  • 9) information on shareholders (members) of the issuer holding more than 5 percent of the issuer’s registered capital, including full (abbreviated) name, country of their origin (citizenship), contact information;
  • 10) quantity of represented non-resident’s securities , the property right to which is certified by one UDR of the issue;
  • 11) full name of a foreign depository carrying out registration and confirmation of the rights to represented non-resident’s securities , its bank details, its location (the state title) and postal address, as well as its official website and e-mail;
  • 12) conditions of UDR placement;
  • 13) rights of UDR owners, and a procedure of realization by UDR owners rights vested by represented non-resident’s securities;
  • 14) the obligation of Central depository to grant or realize, at UDR owner’s request, appropriate quantity of represented non-resident’s securities and transfer the money obtained from their realization to the UDR owner;
  • 15) the obligation of Central depository to sell appropriate quantity of represented non-resident’s securities in case UDR owner claims its repayment, if UDR owner in accordance with legislation of the Republic of Uzbekistan or other foreign country cannot be the owner of represented non-resident’s securities;
  • 16) if represented non-resident’s securities are stocks - the order of giving (direction) by UDR owners instructions on voting procedure to Central depository and the obligation of Central depository to ensure the voting right realization precisely according to the instructions of the UDR owners, as well as the obligation to represent the voting results to the UDR owners;
  • 17) the obligation of Central depository to disclose information in a volume, an order and terms established by authorized government body;
  • 18) the obligation of Central depository to provide conformity of quantity of represented non-resident’s securities to the quantity of UDRs being in circulation;
  • 19) the obligation of Central depository to provide services on realization by the UDR owners rights vested by represented non-resident’s securities, including reception of income (dividends, interests) and other payments, which are due to owners of such securities, as well as the procedure and conditions of rendering such services;
  • 20) term of realization of payments due to the UDR owners under represented non-resident’s securities;
  • 21) information on obligations of the issuer of represented non-resident’s securities to the UDR owners;
  • 22) procedure of storage, record keeping and transfer of rights on UDR;
  • 23) procedure and terms of compiling UDR owners’ list for execution of obligations under them;
  • 24) possibility and procedure of UDR splitting up;
  • 25) possible risks related to UDR acquisition.

In addition to abovementioned, if represented non-resident’s securities are bonds and other debt securities, decision of Central depository on UDR issue must define the procedure of UDR redemption.
10. Decision on UDR issue may contain other information according to the legislation of the Republic of Uzbekistan
11. The list of documents, which must be presented for the state registration of UDR issue, as well as requirements to UDR issue prospectus shall be established by the authorized government body.
12. Review of the documents represented for state registration is charged with five times the amount of the minimum wages established by the legislation of the Republic of Uzbekistan as of the date of the application submission. Amount of the collected fee is transferred to the account of the authorized government body.
13. Documents submitted for the state registration of UDR issue shall be reviewed by the authorized government body within thirty working days after the date of their submission. In case of submission of additional documents by the issuer the term of their revision is estimated anew.
14. Basis for refusal of state registration of UDR issue are as follows:

  • non-presentation of a full package of documents for state registration of the UDR issue;
  • presence of information concerning the issuer indicating to his infringement of the legislation on securities of the non-resident’s country of origin, illegitimacy of his securities, his illegal activity or being in the process of liquidation;
  • other basis, stipulated in the legislation of the Republic of Uzbekistan.

15. In case of conformity to the requirements defined by Clause 4 of this Regulation, UDRs are allowed to placement and circulation at stock exchange of Uzbekistan on the basis of corresponding decision of this stock exchange.
16. Organization of UDRs placement at a stock exchange is carried out by an underwriter on the basis of a contract on underwriting services providing.
17. Placement and circulation of UDRs are carried out by the way of putting them into records at Central depository in the order established by the legislation of the Republic of Uzbekistan and an agreement on interdepositary cooperation concluded between Central depository and a foreign depository serving non-resident’s securities.
Represented non-resident’s securities can be deposited in Central depository for their safekeeping and recordkeeping on the basis of an agreement concluded between Central depository, a foreign depositary and the issuer of these securities.
18. Additional issue of UDR is not subject to the state registration and is carried out by amendments to the decision on the UDR issue regarding increase in the maximum quantity of UDRs issue, which may circulate at the same time, under condition of its conformity to the requirements defined by Clause 7 of this Regulation.
19. Under decision of the authorized government body UDR placement in the territory of the Republic of Uzbekistan is suspended in case of:

  • revealing in the decision on UDR issue or the UDR issue prospectus, as well as in other documents on the basis of which non-resident’s securities have been admitted to placement in the territory of the Republic of Uzbekistan unreliable, incomplete information and (or) information misleading investors;
  • infringement by Central depository and (or) the investment intermediary, which signed the UDR issue prospectus, as well as by the underwriter of this Regulation and regulatory legal acts of the authorized government body adopted in accordance with this Regulation;
  • receipt by the authorized government body from organization regulating securities market in the issuer’s country of origin information on the latter’s infringement of the legislation, including legislation on counteraction to legalization of income received from criminal activity and terrorism financing, as well as information on cancellation or suspension of placement and circulation of non-resident’s securities , or in case of liquidation or suspension of activity of the securities’ issuer.
  • 20. After finishing of the UDR placement Central depository must notify the authorized government body on completion of this placement in the order and terms established by the legislation of the Republic of Uzbekistan.
  • 21. Circulation of UDR in the territory of the Republic of Uzbekistan is allowed after notification specified in Clause 20 of this Regulation and information disclosure on completion of their placement in the territory of the Republic of Uzbekistan, if terms of represented non-resident’s securities do not contain requirements to the volume of issue for recognition the issue as taken place.

III. ORDER OF PLACEMENT AND CIRCULATION OF RESIDENT’S SECURITIES OUTSIDE THE TERRITORY OF THE REPUBLIC OF UZBEKISTAN
22. Resident’s securities could be placed and circulated outside the territory of the Republic of Uzbekistan in the volume not exceeding 25 percent of total amount of issued securities of the given type (category, class), unless otherwise is established by the legislation of the Republic of Uzbekistan.
23. Placement and circulation of resident’s securities outside the territory of the Republic of Uzbekistan are carried out in accordance with legislation of the corresponding country on securities of foreign issuers, unless otherwise is established by international treaties of the Republic of Uzbekistan.
24. Resident’s securities are placed and circulated outside the territory of the Republic of Uzbekistan in the form of depositary receipts issued by a foreign depository, in accordance with the legislation of the country where they are allowed for placement and circulation.
25. The property right to the resident’s securities placed outside the territory of the Republic of Uzbekistan is certified by Central depository in accordance with the legislation of the Republic of Uzbekistan.
26. Placement and circulation outside the territory of the Republic of Uzbekistan of securities of a resident – business entity with the state share in it, having strategic importance for the economy of the republic, are subject to preliminary consideration by the Commission on monitoring over the effective usage of the state-owned shares at joint stock unions and companies.
27. Resident’s securities placed outside the territory of the Republic of Uzbekistan are safe kept and recorded in Central depository.
In case of placement of resident’s securities outside the territory of the Republic of Uzbekistan the rights to these securities are transferred to owners of depositary receipts, which represent them, only after the issuer’s confirmation of money receipt from their placement to his settlement account in a commercial bank of the Republic of Uzbekistan through sending corresponding notification to Central depository.
28. Central depository, on the basis of the corresponding agreement with the foreign depository, endorses presence of the represented resident’s securities to owners of the depositary receipts.
29. The foreign depository is recorded in the register of owners of the issuer-resident’s securities as a nominal holder of securities.
IV. FINAL PROVISIONS
30. In order to prevent or eliminate serious loss or threat of causing of a serious loss to the economy, the Cabinet of Ministers of the Republic of Uzbekistan has the right to apply protective measures by establishment of additional quotas for admission of non-resident’s securities to circulation in the territory of the Republic of Uzbekistan, expressed in restriction of types, quantity and volume of non-resident’s securities.
31. Additional requirements to placement and circulation of securities outside the territory of the Republic of Uzbekistan issued by commercial banks, insurance companies, auditing organizations and professional participants of securities market, shall be established by the authorized state bodies on regulation of activity of the specified organizations.
32. Requirements to the order of currency transactions related to the capital movement, made within the framework of investment activity with the non-resident’s securities admitted to circulation in the territory of the Republic of Uzbekistan, are established by Central bank of the Republic of Uzbekistan.
33. By the decision of the Cabinet of Ministers of the Republic of Uzbekistan UDR issue may be carried out by a commercial bank, in the order provided by this Regulation for Central depository.
34. Entities participating in organization of placement and circulation of non-resident’s securities in the territory of the Republic of Uzbekistan, as well as entities participating in organization of placement and circulation of resident’s securities outside the territory of the Republic of Uzbekistan, bear responsibility before owners of the specified securities for the caused damage in the order established by the legislation of the Republic of Uzbekistan.
"Compilations of laws of the Republic of Uzbekistan",
August 25, 2014, # 34, Art. 437

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