THE ORDER OF THE CENTER FOR COORDINATION AND CONTROL OF FUNCTIONING OF THE SECURITY MARKET UNDER THE STATE PROPERTY COMMITTEE OF THE REPUBLIC OF UZBEKISTAN

of February 7, 2002 No. 2002-01

About approval of the Regulations on activities of the investment intermediary in the security market

According to the Laws of the Republic of Uzbekistan "About the security market" and "About the exchanges and exchange activities", and also the Regulations on the Center for coordination and market development of securities in case of Goskomkonkurention of the Republic of Uzbekistan approved by the resolution of the Cabinet of Ministers of March 30, 1996 No. 126, I order:

1. Approve the enclosed Regulations on activities of the investment intermediary in the market valuable bumag.2. Enact this order after ten days from the date of its state registration in the Ministry of Justice of the Republic of Uzbekistan.

3. From the date of entry into force of this order to declare invalid the Regulations on investment intermediaries approved by the Center for coordination and control of functioning of the security market under the State Property Committee of the Republic of Uzbekistan of March 25, 1997 (reg. No. 326 of April 2, 1997), and also changes and amendments No. 1 to the Regulations on investment intermediaries approved by the Center for coordination and control of functioning of the security market under the State Property Committee of the Republic of Uzbekistan of October 20, 2000 No. 10-2000 (reg. No. 326-1 of 10.11.01).

Approved by the Order of the CEO of the Center for coordination and control of functioning of the security market under the State Property Committee of the Republic of Uzbekistan of February 7, 2002 No. 2002-01

Regulations on activities of the investment intermediary in the security market

§ 1. General provisions

1. For the purpose of this provision the following concepts are used:

the investment intermediary - the professional participant of the security market performing transactions and transactions with securities at the request of the client from name and for customer account;

the broker - the investment intermediary who is the member of stock exchange, concluding stock exchange transactions at the request of the client and at his expense;

the dealer - the investment intermediary who is the member of stock exchange, concluding stock exchange transactions on its own behalf and at own expense;

the client - the depositor or the other person using services of the investment intermediary in the security market;

conflict of interest - the contradiction between valuable and other interests of the investment intermediary and (or) his workers (further - workers) performing the activities based on the employment or civil contract, and the client of the investment intermediary as a result of which action (failure to act) of the investment intermediary and (or) his workers cause losses to the client and (or) is attracted by adverse effects for the client;

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

1-1. The commercial banks having licenses for implementation of banking activity and the insurers having licenses for implementation of the insurance activity having the right to perform professional activity in the security market as the investment intermediary. At the same time obtaining by commercial banks and insurers of the separate license for implementation of professional activity in the security market is not required.

§ 2. General requirements to implementation of activities of the investment intermediary

2. The investment intermediary when implementing professional activity in the security market shall:

as the nominee holder to render assistance to the clients in timely and complete receipt of the income on securities, including nominal value in case of repayment of security;

carry out orders of clients on drawing of requests of purchase and sale, the translation of securities honesty and according to the procedure of their receipt;

inform clients all necessary information connected with the conclusion and execution of agreements, to report to them on committed transactions and transactions;

in case of conflict of interest, including connected with combination of dealer transactions by it, immediately to notify the client on emergence of such conflict of interest and to take all necessary measures for its permission for benefit of the client;

pay to the client the damages caused as a result of conflict of interest of the investment intermediary and his client on whom the client was not notified before receipt of the corresponding order by the investment intermediary;

make transactions on the order of clients in first-priority procedure in comparison with dealer transactions of the most investment intermediary;

notify the client on the risks connected with execution of the order and obligations on security transactions;

give opportunity to clients independently to buy and sell securities at the organized biddings by securities according to rules of organizers of the biddings by securities, at the same time responsibility for consequences, investment risks according to transactions are born by clients;

follow rules of organizers of the biddings valuable to papers, when implementing transactions with securities at the organized biddings by securities;

keep internal account of transactions with securities, and also organize and exercise internal control according to regulatory legal acts of authorized state body on regulation of the security market, own procedures and rules;

provide compliance of the size of own means to standard rates of sufficiency of own means established by authorized state body on regulation of the security market;

record securities and money of each client, to perform transactions and transactions with securities according to the agreement signed with the client.

2-1. Investment intermediaries can sign contracts with issuers on sale of issued securities on behalf of the issuer with acceptance or without acceptance on themselves obligations according to the redemption of not placed part of release of issued securities.

3. When implementing professional activity in the security market as the investment intermediary it is forbidden:

a) make any security transactions without the corresponding license;

b) sign contracts which limit their rights, stipulated by the legislation with clients;

c) participate in the forbidden transactions, or transactions which can lead to violation of requirements of the legislation;

d) make security transactions, belonging to the investment intermediary, before their complete payment, except for uses of netting;

e) guarantee to the client investment incomes in securities;

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