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Ministry of Justice

Republic of Uzbekistan

On September 21, 1999 No. 820

Approved by the State Property Committee of the Republic of Uzbekistan, the Center for coordination and control of functioning of the security market of June 23, 1999 No. 04/103

(as amended on 15-03-2019)

Rules of prevention of manipulation in the security market

I. General provisions

1.1. These rules are developed according to the laws of the Republic of Uzbekistan "About the security market", "About joint-stock companies and protection of shareholder rights" and determine procedure for the prevention and suppression of cases of manipulation in the security market.

1.2. These rules establish requirements to actions of professional participants of the security market, owners of the securities and investors performing activities in the security market.

1.3. The manipulation signs the prices in the security market following from these rules are not exhaustive and obligatory in case of determination and recognition of the manipulation fact by court.

1.4. For the purposes of these rules the following terminology is used:

members of the security market are issuers of securities, owners of securities, investors, professional participants of the security market, and also exchange according to the procedure, established by the legislation;

the professional participant of the security market (further - the Participant) the legal entity who performs professional activity in the security market;

the client of the professional participant of the security market (further the Client) - the depositor or the other person using services of the professional participant of the security market;

security transactions - purchase and sale, donation, inheritance of securities, their entering into authorized capital and other acts involving change of the owner of securities, and also pledge of securities;

manipulation in the security market - making of transactions (transactions) with securities by the provisional agreement between members of the security market, intentional distribution of obviously false data, and also making of other action for the purpose of extraction of benefit from violation of the basic principles of exchange activities as a result of which the price, demand, the offer or the trading volume deviated by securities level or were supported at the level, significantly different from that level which would be created without such actions;

the subject of manipulations - the member of the security market performing manipulation subject to manipulations in the security market (further the manipulator);

subject to manipulations - the price or amount of the specific transaction of purchase and sale and/or number of committed security transactions, valuable interests of members of the security market;

authorized state body on regulation of the security market - Agency on market development of the capital of the Republic of Uzbekistan.

II. Measures of prevention of manipulation in the security market

2.1. Requirements to Participants in case of transactions with securities

2.1.1. The participant performing transactions with securities at the request of clients shall:

a) refuse acceptance of orders on purchase of any securities if he knows that the client cannot pay the transaction;

b) not accept the order on security sale if he knows that the client has no the property right to the valuable data papers or they are encumbered with other obligations (pledge, arrest, etc.) and will not be able timely to provide after the conclusion of the transaction them to the order of the buyer;

c) warn the client about the possible risks connected with obligation fulfillment on delivery of securities or payment of the acquired securities to terms established by the legislation and the purchase and sale agreement;

d) inform the client in time, established by the agreement of the order (commission) on the fact of the conclusion and results of the transaction or on the reasons not of the conclusion of security transaction;

e) when obtaining from the client of the power of attorney from his name of series of transactions with securities or about asset management of the client to affect making strictly within the powers stipulated in the power of attorney in which all conditions of relations of the client and Participant shall be established;

e) not accept to execution the order of the client if he knows that accomplishment will lead to manipulation situation the prices;

g) within two working days in writing to inform authorized state body on regulation of the security market if he knows of the facts of intentional non-execution or untimely execution by the client of obligations according to the transaction of depot.

2.1.2. The participant in case of the conclusion with the client of the agreement of the order (commission) shall provide in it the following compulsory provisions and information:

a) number and date of issue of the license for implementation of professional activity obtained by it in the security market and the qualification;

b) type of professional activity in which it in the right is engaged in connection with implementation of the specific transaction and rendering services in the security market;

c) obligations and the sizes of expenses of the client on commission fee, payments for consulting services, other charges and payments for implementation of transactions and rendering the other services connected with transactions in the security market.

2.1.3. Participants can make transactions for customer account only on the basis of the agreements of the order or the commission signed according to requirements of the current legislation and according to all necessary conditions specified in them in case of which accomplishment the client would find possible transaction.

2.1.4. In case of transactions with securities of the party shall come to the agreement on the following conditions:

type and full name of securities (inclusion of registration security number is recommended);

the term and method of transfer of securities and their payment (transaction price), conditions of business risk insurance on the transaction if that is available;

the size of commission fee for execution of the transaction.

The parties can under the mutual agreement include in the conditions of transaction and any other conditions which are not contradicting the current legislation.

2.1.5. Participants shall represent on the first demand of the clients to them copies of purchase and sale agreements of the securities signed according to their orders and give information on conditions of committed transactions, including:

full name of the purchased or sold securities and number of their state registration;

the quantity of the purchased or sold securities and their nominal value;

transaction price;

actual amount of commission (broker) fee, payment for consulting services and other charges and payments for rendering other services when making the specific transaction;

the amounts of the taxes paid in connection with implementation of the transaction and other obligatory payments;

procedure, time and methods of implementation of payment under transactions and deliveries to buyers of the acquired securities;

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