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 July 15, 2004 No. 2004-16

About approval of the Regulations on transactions with repo securities

According to 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 the Republic of Uzbekistan of March 30, 1996 No. 126, I order:

1. Approve Regulations on transactions with repo securities according to appendix.

2. Enact this order after ten days from the date of its state registration in the Ministry of Justice of the Republic of Uzbekistan.

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 June 15, 2004 No. 2004-16

Regulations on transactions with repo securities

This Provision according to the Law of the Republic of Uzbekistan "About the security market", other regulatory legal acts determines procedure for transactions of repo with securities in the territory of the Republic of Uzbekistan.

§ 1. General provisions

1. Action of this provision extends to transactions of repo with the shares, corporate bonds and derivatives of securities made by residents of the Republic of Uzbekistan in the territory of the Republic of Uzbekistan.

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

the transaction of repo - the transaction of purchase and sale of securities with condition of their return redemption;

the repo-agreement - the agreement signed by the parties of the transaction for transaction of repo, determining price and other conditions, and also terms of this transaction;

the initiator of repo - the party which exposed the request in trade system with the offer to take part in the transaction of repo;

the acceptor of repo - the party which concluded with the initiator of repo the bargain in trade system;

securities - the chain securities issued by business entities according to the procedure established by the legislation;

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

§ 2. Requirements to implementation of transactions of repo

3. Transactions of repo with securities can make residents of the Republic of Uzbekistan on specialized platforms of stock exchange and the organizer of the off-exchange biddings by securities (further - organizers of the biddings by securities).

4. It is not allowed to perform transactions of repo with not placed securities and also redeemed or otherwise the securities which went issuers into the disposal (except for bonds and derivative securities).

5. The repo agreement is constituted between the initiator of repo and the acceptor of repo and shall contain conditions of initial securities disposal (the price, quantity and other conditions as agreed by the parties), and also conditions of the return redemption of securities (the term, quantity, the price, the name of the acquirer and other conditions as agreed by the parties).

6. The repo agreement becomes effective from registration date at the organizer of the biddings by securities.

7. Changes and amendments in the repo-agreement, including term, the price, the number of securities, rate of remuneration and other conditions, become effective only after registration by the organizer of the biddings by securities.

8. The procedure and conditions of registration of repo-agreements by the organizer of the biddings by securities, and also terms, procedure and conditions of deposition of money and blocking of securities on the biddings according to transactions of repo are established by rules of the organizer of the biddings by securities.

§ 3. Conditions of transactions of repo

9. The initiator of repo can expose the request on special trading floor of the organizer of the biddings by securities.

10. The exposed requests shall contain the price of initial securities disposal, term of expected alienation and rate of remuneration (as a percentage to total cost of alienable securities).

The legal entity from shares of the state in authorized fund acting as the acceptor according to the transaction of repo shall establish remuneration rate according to the transaction of repo in the amount of, at least refunding rate of the Central bank of the Republic of Uzbekistan in annual basis for date of the conclusion of the transaction.

The remuneration rate is determined by the transaction of repo in annual basis following the results of the held auction and it is specified in the repo-agreement registered by the organizer of the biddings by securities.

11. The initiator of repo can in the course of the biddings at the request of the become interested party to change quantity, the price of securities disposal, term of alienation and rate of remuneration.

12. If the parties will come to the agreement under the terms of the price and the number of securities, dates of alienation and the redemption of securities, the trade system fixes the transaction which is drawn up by the repo-agreement.

13. After the end of trading session the initiator of repo and the acceptor of repo shall sign the repo-agreement and register it within one working day at the organizer of the biddings by securities.

14. The quantity of the securities which are back redeemed according to the repo-agreement shall be equal to the number of originally alienable securities according to the transaction of repo.

15. Registration of the transaction of purchase and sale on the return redemption shall be made at the organizer of the biddings by securities who registered the repo-agreement.

16. The transaction of repo is drawn up in the form of two transactions on purchase and sale of securities and performed in two stages.

17. At the first stage securities disposal on the conditions specified in the repo-agreement is performed.

18. At the second stage the return redemption of securities on the conditions specified in the repo-agreement is performed.

19. The parties which signed the repo-agreement are the parties of the transaction of repo. The party of the transaction acting at the first stage of the transaction of repo as the alienor of securities at the second stage of the transaction of repo acts as the acquirer of securities.

20. Transition of rights of possession, uses and orders on securities, is established according to the current legislation.

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