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LAW OF UKRAINE

of February 23, 2006 No. 3480-IV

About the capital markets and the organized goods markets

(as amended on 02-09-2020)

Section I General provisions

Article 1. Scope of the Law

1. This Law governs the relations arising in case of issue, the address, the redemption of securities and obligation fulfillment on them, the conclusion and execution of derivative contracts, replacement of the party of derivative contracts and transactions concerning financial instruments in the capital markets and also the relations arising when implementing professional activity in the capital markets and the organized goods markets.

2. Operation of this Law does not extend to activities of the operator of the market of electrical energy, the operator of system of transfer, the operator of gas-transport system and to the relations connected with functioning of the market of electrical energy according to the Law of Ukraine "About the market of electrical energy", functioning of the natural gas market according to the Law of Ukraine "About the natural gas market" and functioning of the sphere of heat supply according to the Law of Ukraine "About state regulation in the sphere of utilities". The relations connected with activities in spheres of power and utilities are regulated by the National commission performing state regulation in spheres of power and utilities according to the Law of Ukraine "About the National commission performing state regulation in spheres of power and utilities".

3. Operation of this Law does not extend on:

1) the relations connected with making and execution of transactions (except derivative contracts and transactions on them) out of the organized markets (except implementation of clearing activities, implementation of liquidating netting) relatively:

a) currency values;

b) products;

2) the relations connected with making and execution of transactions concerning the things determined by individual signs (except securities).

4. Activities of participants of the goods markets are regulated by the legislation on such goods markets. Activities of commodity exchanges are regulated by the Law of Ukraine "About commodity exchanges". Operation of this Law does not extend to commodity exchanges, except the cases which are directly provided by this Law.

5. Operation of this Law does not extend to the relations connected with functioning of multilateral systems and their operators if rules of functioning of the organized markets do not provide in any form, obligation of centralized transactions or does not provide obligation of centralized accomplishment of transactions, or does not provide obligation of centralized making and centralized accomplishment of transactions.

6. Operation of this Law does not extend to the relations connected with functioning of electronic purchasing system according to the Law of Ukraine "About public purchases".

Article 2. Determination of terms

1. In this Law the below-stated terms are used in such value:

1) the administrator on bond issue (further - the administrator) - the legal entity who acts on its own behalf and for the benefit of owners of release of interest or discount corporate bonds, bonds of internal local loans, bonds of international financial institutions or mortgage bonds according to the legislation, the agreement on appointment of the administrator, the securities prospectus (the decision on issue of securities) and decisions of meeting of bondholders;

2) the asset admitted to trading on multilateral trading floor - the securities admitted to trading on multilateral trading floor, including derivative securities and derivative contracts;

3) the asset admitted to trading in the organized market - the asset admitted to trading in the controlled market or the asset admitted to trading on multilateral trading floor or the asset admitted to trading on organized trading floor or the asset admitted to trading at commodity exchange;

4) the asset admitted to trading in the controlled market, - admitted to trading in the controlled market of securities, including derivative securities, derivative contracts, tools of the money market and currency values;

5) the asset admitted to trading on organized trading floor - the bonds and derivative contracts admitted to trading on organized trading floor;

6) outsourcing - attraction by the professional participant based on the relevant agreement of other person (service provider) to implementation of processes, the provision of services, performance of works constituting part of implementation by such professional participant of professional activity in the capital markets and the organized goods markets;

7) multilateral trading floor (further - MTP) - the multilateral system which is operated by the operator of multilateral trading floor and in the procedure established by the National commission on securities and the stock market and according to the non-discriminatory rules determined by such operator MTP provides interaction of the third parties on purchase and sale of financial instruments (the conclusion of derivative contracts) what contracts (contracts) signed in the procedure established by this Law are result of;

8) close relations - the family relations between persons who jointly live are connected by general life and have the mutual rights and obligations, including between persons who jointly live, but are not in scrap, and also irrespective of the specified conditions of the relation between the husband and the wife, the father (stepfather), mother (stepmother) and the son (stepson) and/or the daughter (stepdaughter), the adoptive father and adopted, the son-in-law and the father-in-law, the mother-in-law, the daughter-in-law and the father-in-law, the mother-in-law, and also the guardianship relations between the guardian and person who is under guardianship, the guardianship relations between the guardian and person who is under guardianship;

9) the redemption of securities - acquisition by the issuer or person who issued security, the securities placed by it or issued to them;

10) issue of securities - set of certain type of issued securities of one issuer, one nominal value which have the identical form of release and the international identification number provide them to owners the identical rights irrespective of time of their acquisition;

11) internal system of accounting of person performing clearing activities (further - system of clearing accounting), - system, by means of which person performing clearing activities:

a) records the rights and obligations of participants of clearing, their clients and partners, own rights and obligations (if person performs clearing activities of the central partner) for prisoners in the organized market and out of his derivative contracts, agreements of rather financial instruments, currency values and commodity transactions;

b) records information on the means, securities, other financial instruments and other assets brought for implementation of calculations or the organization of carrying out contract settlements and to the agreements specified in the subitem "an" of this Item;

c) records fees of participants of clearing in warranty and other funds connected with clearing implementation;

d) perfroms calculations and/or will organize carrying out contract settlements and to the agreements specified in the subitem "an" of this Item;

ґ) records other information determined by the National commission on securities and the stock market;

12) the general agreement - the agreement determining general terms and procedure for the conclusion and execution of derivative contracts or transactions concerning financial instruments or transactions concerning currency values, either repurchase agreements, or the commodity bargains concluded based on such agreement;

13) derivative financial instruments - derivative securities and derivative contracts;

14) government securities - government bonds of Ukraine, treasury obligations of Ukraine, financial treasurer bills of exchange, the state derivatives;

15) default - one or several circumstances determined by the securities prospectus (the decision on issue of securities) of regular bonds (except bonds of external state loans) or mortgage bonds which constitute violation of obligations of the issuer or person providing providing on bonds, or doing harm to the rights and/or interests of bondholders and in case of which approach bondholders acquire the rights determined by this Law, other acts of the legislation and/or the prospectus (the decision on issue) of such bonds. In case of absence the circumstances determined by this Law are recognized the securities prospectus (the decision on issue of securities) of the specified circumstances those;

16) the agreement on replacement of the party of the derivative contract (further - the agreement on replacement of the party) - the sale and purchase agreement of right to claim under derivative contracts or other agreement which consequence replacement of the party of the derivative contract is;

17) the repurchase agreement - the purchase and sale agreement and the return purchase and sale which subject is the thing determined by patrimonial signs;

18) goodwill - set of documentary confirmed information on physical person or legal entity which gives the chance to draw conclusion on compliance of its activities to requirements of the legislation, business practice and professional ethics, and also data on decency, professional and managerial capabilities of physical person;

19) meeting of bondholders - the form of consolidation of bondholders provided by this Law for the purpose of protection of their interests and adoption of decisions by them;

20) considerable influence on management or activities of the legal entity - opportunity to change the head or persons who are designated in governing body of the legal entity, irrespective of the formal direct and/or mediated ownership of one person independently or together with other persons of shares of the authorized capital and/or voting power of shares (shares) of the legal entity, and also possibility of access to insider information which directly or indirectly concerns the legal entity which gives the chance to accept and/or to influence directly acceptance of the management decisions influencing further development and commercial prospects of such legal entity;

21) the endorsement - the endorsement on order security certifying transition of the rights to security is also right on security to other person in the procedure established by the legislation;

22) the endorsee - the owner of order security (its authorized person) who makes the endorsement. The endorsement can be complete (nominal) - written out addressed to or the name (in understanding of the Civil code of Ukraine) the particular person or blank (to bearer) - written out without specifying of name or the name (in understanding of the Civil code of Ukraine) persons;

23) clearing - process of determination of obligations, including by netting, under derivative contracts and transactions concerning other financial instruments, currency values, on commodity transactions which is followed by ensuring functioning of risk management system and guarantees on accomplishment of such obligations;

24) komplayens - the regulated internal documents of the professional participant of the capital markets and the organized goods markets or person performing the activities connected with the capital markets and the organized goods markets, the continuous process aimed at providing and improvement:

a) descriptions of all internal processes connected with implementation of professional activity in the capital markets and the organized goods markets or the activities connected with the capital markets and the organized goods markets;

b) compliance of the internal documents describing the processes provided by the subitem "an" of this Item, to requirements of the legislation on the capital markets and the organized goods markets of standards, rules, other internal documents of self-regulatory organization which member is the professional participant or his securities is admitted by rules of the organized market which participant is such professional participant to trading, and also compliance of the business plan (business strategy) accepted by the supervisory board or other body responsible for implementation of supervision of the professional participant;

c) accomplishment by workers of the professional participant of the capital markets and the organized goods markets or person performing the activities connected with the capital markets and the organized goods markets, the rules and procedures describing the processes provided by the subitem "an" of this Item;

25) small and medium scale enterprises (further - MSP) - the companies which are:

a) issuers of equity securities and which average value of market capitalization within three last years, and for the companies which securities are admitted to trading in the organized market during the period smaller than three years, - during the entire period of admission to trading in the organized market, did not exceed 6 billion hryvnias;

b) issuers of equity securities which were not admitted to trading in the organized market or are not issuers of equity securities and which aggregate nominal value of all debt securities provided that such securities were admitted to trading in the organized market within the last calendar year, did not exceed 1, 5 billion hryvnias for the last calendar year.

The national commission on securities and the stock market establishes procedure of payments of average value of market capitalization and aggregate nominal value of the debt securities admitted to trading in the organized market;

26) international security identification number (ISIN code) - number (code) allowing to identify unambiguously securities or other financial instrument which assignment is stipulated by the legislation;

27) the international identification code of the legal entity (LEI code) - number (code) which gives the chance unambiguously to identify the legal entity who is member of the capital markets or the organized goods markets whose assignment is stipulated by the legislation;

28) netting - complete or partial discharge of derivative contracts, agreements on replacement of the party, agreements of rather financial instruments, currency values or of commodity transactions which is performed by offsetting of counter claims of the same kind and/or replacement of the initial obligation with the new obligation between the same parties and/or discharge with the different way provided by rules of clearing;

29) security circulation (further - the address) - transactions, the rights to securities connected with transition it is also right on securities, except transactions, one of the parties of which is the issuer or person who issued not issued security;

30) the operator of multilateral trading floor (further - the operator of MTP) - the joint-stock company, limited liability company or additional liability company which exercises control and provides functioning of multilateral trading floor based on the license granted by the National commission on securities and the stock market;

31) the operator of the organized market - the operator of the organized market of the capital (the operator of the controlled market, the operator of MTP, operator of organized trading floor) and the operator of the organized goods market (commodity exchange);

32) the operator of organized trading floor (further - the operator of OTP) - the joint-stock company, limited liability company or additional liability company which exercises control and provides functioning of organized trading floor based on the license granted by the National commission on securities and the stock market;

33) the operator of the controlled market - the joint-stock company, limited liability company or additional liability company which exercises control and provides functioning of the controlled market based on the license granted by the National commission on securities and the stock market;

34) the description of the derivative contract - the document in which conditions of the derivative contract signed in the organized markets of the capital, others, than the controlled market, or out of the organized market are determined;

35) organized trading floor (further - OTP) - the multilateral system which is not the controlled market or MTP is operated by the operator of OTP and according to discretionary rules of such operator of OTP provides interaction of the third parties on purchase and sale of financial instruments (the conclusion of derivative contracts) what the relevant agreements (contracts) are result of;

36) the face tied by the control relations - person who controls the corresponding person is under its control or together with it is under general control. Local government bodies of one territorial community, their executive bodies, their divisions (departments, managements, departments), and also their heads (deputy managers) are considered as the faces tied by the control relations. For the state and state companies, legal entities, more than 50 percent of shares (share, shares) which directly or indirectly are in state-owned property, state bodies and their heads (deputy managers) to which sphere of management belong are considered as the faces tied by the control relations such companies or being members (shareholders) of such legal entities (enter);

37) person who performs executive functions, - the chairman and members of collegiate executive body, person performing powers of sole executive body, or other physical person responsible for management of the current activities of the professional participant of the capital markets and the organized goods markets, or person performing activities for provision of information services in the capital markets and the organized goods markets, and accountable concerning the specified management to the supervisory board or other body responsible for supervision implementation, including the concerning execution of internal documents on provision of the corresponding services by the specified professional participants or persons performing activities for rendering information services in the capital markets and the organized goods markets and workers of such participants or persons;

38) person performing managerial functions - physical person, which:

a) is part of the supervisory board of the legal entity or other body responsible for supervision implementation, or

b) is person who performs executive functions in such legal entity, or

c) is not part of the supervisory board of the legal entity or other body responsible for supervision implementation, and is not person who performs executive functions, but has continuous access to insider information which directly or indirectly concerns the legal entity, and has powers to make the management decisions influencing further development and commercial prospects of such legal entity;

39) person providing providing - person who acts as the guarantor, as the guarantor or the pledger for the purpose of ensuring obligation fulfillment on securities. For the purposes of this Law person providing providing the insurer with whom the issuer signs the insurance contract of financial risks which subject is risks insurance of non-execution of obligations on securities is also considered;

40) the personal transaction - transactions concerning financial instruments person who performs executive functions in the professional participant of the capital markets and the organized goods markets or his connected agent, the worker of the professional participant of the capital markets and the organized goods markets or his connected agent, the connected agent of the professional participant of the capital markets and the organized goods markets or for the benefit of specified persons in any of the following cases:

a) transactions concerning financial instruments are performed not within accomplishment by such persons of the professional obligations;

b) transactions concerning financial instruments are performed by such persons at the expense of own means or means of persons, related close relations, or persons, related close ties, or clients who directly or indirectly provide to such persons material benefit in addition to commission fee;

41) the offerer of securities (further - the offerer) - the physical person or legal entity which is the owner of securities and performs public offer on the terms of the public sales agreement of such securities;

42) official channel of communication - means of e-mail which address is specified by the member of the capital markets and the professional participant of the organized goods markets in the documents filed to the National commission on securities and the stock market, or means of complex information system of the National commission on securities and the stock market by means of which the National commission on securities and the stock market performs exchange of documents and messages with such participants;

43) the first owner - person, the property right to securities at whom resulted from the conclusion and agreement performance concerning such securities with the issuer or person who acts on behalf of this issuer;

44) repayment of issued securities - set of actions of the issuer and owners of securities which are performed in the procedure established by the National commission on securities and the stock market and are connected with accomplishment by the issuer of obligations on issued securities in the cases established by the law;

45) officials of the professional participant of the capital markets and the organized goods markets - physical persons - the chairman and members of the supervisory board or other body responsible for supervision implementation, the chairman and members of collegiate executive body (person performing powers of sole executive body and his deputies), the corporate secretary, the chief accountant, the chairman and members of other bodies of the professional participant of the capital markets and the organized goods markets, education and which competence are provided by its charter;

46) officials of the issuer are physical persons - the chairman and members of the supervisory board or other body responsible for supervision implementation, the chairman and members of collegiate executive body (person performing powers of sole executive body and his deputies), the chairman and members of other body of the issuer if formation of such body is provided by the charter of society, and for the issuer - the legal entity of the public law - the head and deputy managers of the legal entity;

47) the transaction of rather financial instruments - the paid or non-paid agreement which subject is acquisition and/or the termination of the property right to tools of the money market, the rights to securities and is right on securities;

48) the securities prospectus (further - the prospectus) - the document which is processed when implementing public offer of securities and contains information according to the requirements determined by the law;

49) prudential standard rates - the quantitative and qualitative indexes established by the National commission on securities and the stock market for the purpose of measurement and risks assessment in activities of professional participants of the capital markets and the organized goods markets, prevention or minimization of negative impact of the specified risks on activities of such professional participants who are obligatory for observance by professional participants of the capital markets and the organized goods markets;

50) regulated information in the capital markets and the organized goods markets (further - regulated information) - regular and special information on the issuer, insider information, information on owners of voting shares of more threshold value of blocks of shares, other information which is subject to placement in the database of person performing activities for promulgation of regulated information on behalf of members of the capital markets and professional participants of the organized goods markets and also reveals according to requirements of this Law;

51) the controlled market - the multilateral system which is operated by the operator of the controlled market and in the procedure established by the National commission on securities and the stock market provides according to the non-discriminatory rules established by it the operator of the controlled market and registered in the procedure established by this Law, interaction of the third parties on purchase - sale of financial instruments (the conclusion of derivative contracts) and creation of organizational, technological, information, legal and other conditions for collection and distribution of information concerning the offer of rather financial instruments admitted to trading in such controlled market and demand for them and for carrying out the regular biddings with such tools, and also provides centralized making and centralized accomplishment of transactions, including clearing on such tools;

52) the regular biddings - functioning of the controlled market on permanent basis each trading day within calendar year therefore are provided organizationally - specifications for the conclusion of transactions concerning the assets admitted to trading in such controlled market;

53) debt restructuring on bond issue (further - debt restructuring) - change of method and procedure for obligation fulfillment (including by forgiveness of part of debt and transfer of right to claim to the capital) the issuer and/or person providing the providing approved by meeting of bondholders of the corresponding release;

54) the decision on issue of securities (further - the decision on issue) - the document accepted by authorized body (person) of the issuer which contains stipulated by the legislation information and moves in the National commission on securities and the stock market for registration of issue of securities;

55) securities placement - making by the issuer of securities, including through person, authorized to be effective from his name, the transaction of which acquisition by the first owner of the property right to such securities in the course of their issue according to the procedure is result, established by the legislation, and taking into account prospectus provisions (in case of implementation of public offer) or decisions on issue;

56) calculations for the principle "delivery against payment" - the mechanism of payment under transactions concerning the assets admitted to trading in the organized market and also according to the transactions made out of the organized market during which according to the procedure, established by the National commission on securities and the stock market, there is delivery of the corresponding assets right after the corresponding money transfer and/or discharge of results of netting;

57) risk management system and guarantees of person performing clearing activities - complex of actions of person performing clearing activities, the risks of non-execution or untimely execution of the obligations allowed to clearing directed to decrease;

58) the specification of the derivative contract - the document in which standard (standard) conditions of the derivative contract which is signed in the organized market of the capital are determined;

59) circulation period of issued securities (further - circulation period) - the term which begins from the date of following behind day of registration by the National commission on securities and the stock market of the report on results of issue of securities and issue of the registration certificate of the corresponding issue of securities, and comes to an end in the afternoon, preceding day of the beginning of repayment of such securities according to the prospectus or decisions on issue;

60) close ties - the relations between:

a) associated company and the legal entity concerning whom it is associated;

b) two or more legal entities connected by control;

c) two or more legal entities connected by essential participation;

d) related persons;

61) commodity transactions - the agreements providing accomplishment it is exclusive by the actual transfer, movement and/or delivery of products and concluded in the organized goods markets or out of the organized goods markets;

62) trading day - the period of time established by internal documents of the operator of the organized market during which functioning of multilateral system which control of activities it exercises provides possibility of making by the third parties of transactions concerning the assets admitted to trading in the organized market;

63) trading floor - the controlled market, MTP or OTP;

64) trade repository - joint-stock company, limited liability company or additional liability company which performs centralized collection and accounting of the signed derivative contracts and the signed agreements on replacement of the party of derivative contracts, on condition of its inclusion in the Register of trade repositories and receipt of the certificate on inclusion in the Register;

65) prospectus format - contents of the prospectus, its components, including their sequence, requirements for which are established by the National commission on securities and the stock market.

2. Other terms are used in this Law in such values:

terms "associated company", "essential participation", "controller", "control", "credit institute", "connected person", "related person", "financial institution" - in the values given in the Law of Ukraine "About financial services and state regulation of the markets of financial services";

the terms "structure of property of the legal entity", "member of the legal entity" - in the values given in the Law of Ukraine "About banks and banking activity";

the term "currency values" - in the value given in the Law of Ukraine "About currency and currency transactions";

the terms "faultless goodwill", "identification data" - in the values given in the Law of Ukraine "About prevention and counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction";

the term "payment institute" - in the value given in the Law of Ukraine "About payment systems and money transfer in Ukraine";

the terms "threshold values of the block of shares", "considerable block of shares" - in the values given in the Law of Ukraine "About joint-stock companies";

the terms "nominee holder", "calculations for the principle "delivery of securities against payment" - in the values given in the Law of Ukraine "About depositary system of Ukraine";

the term "information security" - in the value given in the Law of Ukraine "About information";

the term "mortgage" - in the value given in the Law of Ukraine "About mortgage";

the term "products" - in the value given in the Law of Ukraine "About commodity exchanges";

the terms "it is information-telecommunication system", "information system", "telecommunication system" - in the values given in the Law of Ukraine "About information security in it is information - telecommunication systems";

the terms "payment report for benefit of the state", "the companies which are of public interest" - in the values given in the Law of Ukraine "About financial accounting and the financial reporting";

the terms "subject of auditor activities", "audit report" - in the values given in the Law of Ukraine "About financial records audit and auditor activities";

the term "certificate of FON" - in the value given in the Law of Ukraine "About financially - credit mechanisms and property management in case of construction of housing and real estate transactions".

Article 3. Legal basis of functioning of the capital markets and organized goods markets

1. The legal basis of functioning of the capital markets and the organized goods markets the Constitution of Ukraine, this Law, the laws of Ukraine "About state regulation of the capital markets and the organized goods markets", "About depositary system of Ukraine", "About institutes of joint investment" constitute, other laws of Ukraine concerning the specified sphere, and also the international agreements of Ukraine which consent to be bound is provided by the Verkhovna Rada of Ukraine, and other acts of the legislation of Ukraine.

2. In obligation fulfillment of Ukraine under the Agreement on association between Ukraine, on the one hand, and the European Union, European Atomic Energy Community and their state members, on the other hand, this Law and regulatory legal acts of the National commission on securities and the stock market specified in this Law are directed to implementation of acts of the European Union law in the sphere of the capital markets and the organized goods markets, in particular:

1) Directives No. 98/26/EU of May 19, 1998;

2) Directives No. 2002/47/EU of June 6, 2002;

3) Directives No. 2002/87/EU of December 16, 2002;

4) Directives No. 2004/109/EU of December 15, 2004;

5) Regulations (EU) No. 648/2012 of July 4, 2012;

6) Directives No. 2013/36/EU of June 26, 2013;

7) Regulations (EU) No. 575/2013 of June 26, 2013;

8) Directives No. 2014/65/EU of May 15, 2014;

9) Regulations (EU) No. 600/2014 of May 15, 2014;

10) Regulations (EU) No. 596/2014 of April 16, 2014;

11) Regulations (EU) No. 2017/1129 of June 14, 2017;

12) Regulations (EU) No. 909/2014 of July 23, 2014;

13) other acts of the EU drafted in execution or amendment of the acts specified in Items 1 - the 12th this part.

Article 4. Capital markets

1. The capital markets are stock market, the market of derivative financial instruments and the money market.

The stock market (security market) is set of stock market participants and legal relationship between them concerning issue (issue), the address, obligation fulfillment, the redemption and accounting of securities (including derivative securities).

The market of derivative financial instruments is set of participants of the market of the derivative financial instruments and legal relationship between them arising in case of issue of derivative securities, the conclusion of derivative contracts, making and execution of transactions concerning derivative securities, the conclusion and execution of agreements on replacement of the party of derivative contracts, obligation fulfillment on derivative financial instruments.

The money market is the set of participants of the money market and legal relationship between them arising during transactions on tools of the money market and currency values.

2. Members of the capital markets are stock market participants, participants of the market of derivative financial instruments, and participants of the money market.

Stock market participants are issuers, including foreign, or persons who published not issued securities, persons who provide providing, investors in financial instruments which acquired the property rights to securities, the administrators, professional participants of the capital markets, persons performing the activities connected with the capital markets and the organized goods markets, associations of professional participants of the capital markets.

Participants of the market of derivative financial instruments are issuers of derivative securities, investors in financial instruments which are the parties of derivative contracts, investors in financial instruments which acquired the property rights to derivative securities, the professional participants of the capital markets, persons performing the activities connected with the capital markets and the organized goods markets, associations of professional participants of the capital markets and also the legal entities performing the activities specified regarding the sixteenth article 44 of this Law.

Participants of the money market are issuers of tools of the money market, persons who issued not issued tools of the money market, persons who provide providing, investors in financial instruments which acquired the property rights to tools of the money market, the professional participants of the capital markets and persons performing the activities connected with the capital markets and the organized goods markets.

The issuer is legal entity, territorial community on behalf of representative body of local self-government, the state on behalf of the public authorities authorized by it, international financial institution which on its own behalf place issued securities and undertake obligations on such securities to their owners.

The foreign issuer is the legal entity created according to the legislation of other state performing issue of securities in the territory of Ukraine or the legal entity whose securities are registered according to the legislation of other state and admission to the address in the territory of which Ukraine is provided by the National commission on securities and the stock market.

According to the Law of Ukraine "About sanctions" issue and security circulation of the issuer created according to the legislation of the state performing the armed aggression against Ukraine in the value given in article 1 of the Law of Ukraine "About defense of Ukraine" can be prohibited or limited and/or it is directly or indirectly controlled by persons which are residents of the specified state.

Person who issued not issued security is physical person, including physical person foreigner or the legal entity, including the foreign legal entity who on its own behalf issues (fills in) the certificate (form) of not issued security and undertakes obligations on such security to its owner.

Investors in financial instruments are physical persons and legal entities, including physical persons foreigners and foreign legal entities who acquired the property rights to financial instruments for the purpose of income acquisition from invested funds and/or preserving cost of the enclosed assets, and/or acquisition of the appropriate rights granted to the owner of financial instruments according to the legislation or within execution of powers on public administration in the respective sphere or which are the parties of derivative contracts.

Institutional investors are investors in financial instruments which are institutes of joint investment (share and corporate investment funds), investment funds, mutual funds of investment companies, non-state pension funds, funds of bank management, insurance companies, other financial institutions which perform transactions with financial assets for the benefit of the third parties on own account or at the expense of such persons, and in cases, stipulated by the legislation, - also at the expense of the financial assets attracted from other persons.

Features of investment by institutional investors are determined by the law.

Skilled investors in financial instruments (professional clients) (further - skilled investors) are investors in financial instruments which have abilities, experience and knowledge in the field of the capital markets, sufficient for adoption by them of independent investment decisions and risks assessment concerning transactions concerning financial instruments. Skilled investors are persons determined by article 6 of this Law.

The self-regulatory organization of professional participants of the capital markets is consolidation of professional participants of the capital markets which conforms to the requirements established by the National commission on securities and the stock market.

Professional participants of the capital markets are legal entities who function in organizationally - legal form of joint-stock company, limited liability company or additional liability company, performing professional activity which types are determined by the law in the capital markets. The Central Securities Depository has the status of the professional participant of the capital markets.

The National Bank of Ukraine performs professional activity in the capital markets according to the law. The national commission on securities and the stock market in coordination with the National Bank of Ukraine can establish features of implementation of professional activity by the National Bank of Ukraine in the capital markets.

The legal entity who answers at least one of the following criteria cannot be the professional participant of the capital markets:

1) the legal entity is created according to the legislation of the state performing the armed aggression against Ukraine in the value given in article 1 of the Law of Ukraine "About defense of Ukraine";

2) sanctions according to the Law of Ukraine "About sanctions" are applied to the legal entity;

3) the legal entity is included in the list of faces tied with implementation of terrorist activities or to which the international sanctions are applied;

4) the legal entity is under control to persons specified in Items 1 - 3rd this part, or has such persons in the structure of property of the legal entity;

5) the legal entity does not conform to the requirements established by the legislation to professional participants of the capital markets.

3. Trade in financial instruments is performed in the organized markets of the capital and out of them.

The organized markets of the capital are the controlled markets (share, derivative contracts, cash), MTP (share, derivative contracts) and OTP (bonds and derivative contracts).

4. If other is not established by the law or one of the parties of the transaction does not require other, the transaction concerning financial instruments which are made out of the organized market, not requiring the notarial certificate.

Article 5. Goods markets

1. The commodity spot - the market is set of participants of the goods markets and legal relationship between them concerning purchase and sale, transfer, movement, delivery, products exchange by the conclusion commodity spot contracts.

The commodity spot contract is agreement which conditions provide that the actual transfer, movement, delivery, exchange of products is planned is performed within the greatest of the following periods:

1) two working days;

2) the period determined by the business custom fixed in rules of commodity exchange.

2. Participants commodity spot - the markets are the professional participants of the organized goods markets, subjects of managing performing sale and/or purchase, transfer, distribution, delivery of products, and other faces carried by the legislation to participants of the commodity spot markets.

3. Professional participants of the organized goods markets are the legal entities performing activities for the organization of trade in products, namely commodity exchanges.

The legal entity who answers at least one of the following criteria cannot be the professional participant of the organized goods markets:

1) the legal entity is created according to the legislation of the state performing the armed aggression against Ukraine in the value given in article 1 of the Law of Ukraine "About defense of Ukraine";

2) sanctions according to the Law of Ukraine "About sanctions" are applied to the legal entity;

3) the legal entity is included in the list of faces tied with implementation of terrorist activities or to which the international sanctions are applied;

4) the legal entity is under control to persons specified in Items 1 - 3rd this part, or has such persons in the structure of property of the legal entity;

5) the legal entity does not conform to the requirements established by the legislation to professional participants of the organized goods markets.

4. Activities for the organization of trade in products are performed by exclusively commodity exchanges based on the corresponding licenses granted by the National commission on securities and the stock market except cases, stipulated by the legislation.

Article 6. Skilled and unskilled investors

1. Skilled investors are:

1) international financial institutions;

2) foreign states and their Central Banks;

3) the state of Ukraine on behalf of the central executive body authorized on realization of the state budget policy in the sphere of national debt management and the debt guaranteed by the state;

4) National Bank of Ukraine;

5) professional participants of the capital markets, banks and insurance companies;

6) the foreign financial institutions answering to the criteria established by the National commission on securities and the stock market;

7) the legal entities including created by the legislation of other state if they answer, at least, two of the following criteria:

a) the balance sheet total constitutes at least 20 million hryvnias;

b) the annual net income from sales of goods, works and services for the last financial year constitutes at least 40 million hryvnias;

c) own means constitute at least 2 million hryvnias. The method of calculation of own means for the purposes of this Law affirms the National commission on securities and the stock market.

2. Other persons who are clients of investment firm except specified in part one of this Article, can be recognized as skilled investors, in general or concerning specific financial service and/or concerning separate competence or types of transactions concerning financial instruments in case of compliance, at least, to two of the following criteria:

1) within the last four quarters were concluded and carried out quarterly at least 10 bargains concerning financial instruments which size is considerable according to the criteria determined by the National commission on securities and the stock market;

2) own the funds placed on bank accounts and securities for total amount more 0, of 5 million hryvnias;

3) have experience of carrying out transactions in the capital markets at least one year or have length of service in financial institution (or the foreign legal entity who has the similar status according to the legislation of other state) on the corresponding specialty at least one year.

3. Persons specified in part two of this Article can according to the procedure, established by this Law and internal documents of investment firm, requirements to which are determined by the National commission on securities and the stock market, address such investment firm and as it to be recognized as skilled investors for the purposes of provision of specific financial service by this investment firm (specific financial services) and/or concerning separate competence (separate transactions) concerning financial instruments.

For recognition of person by the skilled investor the investment firm, except check of compliance of person to the criteria specified in part two of this Article shall perform the corresponding written procedures for the purpose of assessment of abilities, experience and knowledge of physical person or representatives of the legal entity (client) providing good causes to believe that in connection with expected transactions and/or financial services the client can independently make the decision concerning investment and undertake the risks connected with it.

Person (client) can be acknowledged skilled investor only in case of observance of such procedure:

1) such person (client) shall notify investment firm that it (he) wishes that he was recognized as the skilled investor in general or concerning specific financial service and/or concerning separate competence (separate types of transactions) concerning financial instruments in writing;

2) the investment firm shall notify such person (client) in writing about the rights of skilled investors in comparison with the rights of unskilled investors;

3) such person (client) shall in writing in the separate document, other, than the agreement on provision of financial services to confirm that it realizes consequences of application of legislation provisions to it on skilled investors.

Before holding necessary procedures for recognition of person by the skilled investor the investment firm shall apply to such person of provision of the legislation on skilled investors when rendering specific financial service and/or to separate competence (separate types of transactions) to financial instruments.

4. The clients recognized as skilled investors, and skilled investors, specified in Items 5, of 6, 7 parts one of this Article shall inform investment firm on any change which can affect their compliance to the criteria determined by this Article.

Check of compliance of the client - the skilled investor to criteria which give the grounds for application to it of the legislation on skilled investors is carried out by investment firm:

1) in case of receipt of the message of the client - the skilled investor about change which can affect its compliance to the criteria determined by this Article - no later than the termination of the next working day;

2) if the client is recognized as the skilled investor, in particular, based on criterion, stipulated in Item 1 part two of this Article, - once a quarter, during the first five working days of quarter suffices.

If the investment firm will knows that the client - the skilled investor ceased to correspond to the criteria determined by this Article, the investment firm shall review the status of the skilled investor on own initiative.

Irrespective of recognition of person by the skilled investor this person has the right at any time to submit to investment firm the written application that it wishes that provisions of the legislation on skilled investors were not applied to it in the future rather separate competence (separate types of transactions) to financial instruments.

5. Investors who are not or were not recognized as qualified, are unskilled investors.

Article 7. Financial instruments

1. Financial instruments are:

1) securities, including securities of institutes of joint investment;

2) tools of the money market;

3) options, futures, swaps, contracts for future interest rate and any other derivative contracts which underlying asset are securities, currency or other derivative contracts which basic indicator are interest rates, profitability, indexes and rate and which can be executed in the form of physical delivery (deliverable derivative contracts) or calculations (settlement derivative contracts);

4) options, futures, swaps, forwards and other derivative contracts which underlying asset are products which shall or can be executed in the form of calculations for the choice of one of the parties (the mixed derivative contracts), except cases of insolvency or other cases of discharge;

5) options, futures, swaps and other derivative contracts which underlying asset are products concluded on trading floors and can be executed in the form of physical delivery (deliverable derivative contracts), except contracts (agreements) provided by part two of this Article;

6) options, futures, swaps, forwards and other derivative contracts which underlying asset are products which can be executed in the form of physical delivery (deliverable derivative contracts) and which are not specified in Item 5 of this part consist not in commercial purposes and have characteristics of other derivative financial instrument;

7) the derivative financial instruments providing transfer of credit risk, in particular, credit notes and credit default swaps;

8) financial contracts on difference of the prices;

9) options, futures, swaps, contracts for future interest rate and any other derivative contracts concerning climatic parameters, rates of the freight, indicators of inflation or other indicators of economic statistics which shall be executed in the form of calculations (settlement derivative contracts) or can be executed in the form of calculations for the choice of one of the parties (the mixed derivative contracts), except cases of insolvency or other cases of discharge;

10) the derivative contracts concerning assets, the rights, obligations, indexes, rates which are not specified in this part and which have the characteristics of other derivative financial instrument including concluded in the controlled market, OTP or MTP.

2. Are not financial instruments:

1) contracts (agreements) on wholesale energy products which are constituted on OTP, out of the organized market or on any trade platform / place (the centralized or decentralized organized market) which are not MTP or the controlled market and on which delivery is obligatory, including the contracts for difference on energy products / services;

2) deliverable options, futures, swaps, forwards and other derivative contracts which underlying asset are products, 6 parts one of this Article which are not specified in Item consist in commercial purposes and have no characteristic of other derivative financial instrument;

3) commodity spot contracts, irrespective of the platform/place of trade (the market in which they are traded);

4) commodity forward contracts (agreements) with physical delivery, trade in which is performed in the platforms/markets, others, than MTP and the controlled market.

3. Tools of the money market are treasury obligations of Ukraine, savings certificates of banks, deposit certificates of banks, bills of exchange, and also other tools (including securities) having everything from the following characteristics:

1) have the cost which can be determined at any moment;

2) are not derivative financial instruments;

3) have the period before repayment at the time of issue (issue) of 397 days or less.

4. For the purposes of this Article wholesale energy product is:

1) purchase and sale agreements of electrical energy or natural gas with physical delivery in Ukraine;

2) the derivative contracts which underlying asset are the electrical energy or natural gas which are made (are got) delivered or trade in which it is performed in Ukraine or in the states parties of Energy Community;

3) derivative contracts on transfer/transportation or to distribution of electrical energy or natural gas in Ukraine or in the states parties of Energy Community;

4) contracts/agreements (transactions) concerning transportation/transfer or distribution of natural gas or electrical energy;

5) delivery agreements and distributions of electrical energy or natural gas to final consumers if total maximum capacity of consumption of electrical energy or gas installations of the final consumer exceeds the threshold values determined by regulatory legal acts of the National commission performing state regulation in spheres of power and utilities.

5. For the purposes of this Article physical delivery of products which are the subject of the agreement, in particular, are:

1) actual delivery of the subject of the agreement;

2) transfer of the document certifying the property right to the corresponding goods or the corresponding quantity of the corresponding goods;

3) others, provided by the law, methods of transfer of property on certain product quantity without its physical delivery, including the nomination, submission of schedules, messages of rather natural gas or electrical energy.

6. The wholesale energy product is considered such concerning which physical delivery is obligatory if all following conditions are satisfied:

1) its conditions provide obligatory availability at the parties of technical capability to perform physical delivery and to accept products which are the subject of the agreement. Transactions which party are operators of system of transfer, operators of gas-transport system are such which provide obligatory availability at the parties of technical capability to perform physical delivery and to accept products which are the subject of the agreement;

2) its conditions provide unconditional and irrevocable obligations of the parties to perform physical delivery and to accept products which are the subject of the agreement;

3) its conditions do not provide possibility of any of the parties to fulfill obligations on implementation of delivery or acceptance of products which are the subject of the agreement, way of replacement of delivery with implementation of cash calculations;

4) its conditions do not provide possibility of discharge of such transaction by offsetting of counter claims of the same kind (except offsetting of uniform monetary claims and operational netting in the market of electrical energy or natural gas).

7. For the purposes of this Article the derivative contract is such which is constituted for commercial purposes if all following conditions are satisfied:

1) the party is the operator of system of transfer, the operator of gas-transport system;

2) the derivative contract is signed with the purpose of ensuring balance between the demand and supply on electrical energy or natural gas in real time, including contracts (agreements) for acquisition of support services.

8. For the purposes of this Article the derivative contract is such which has characteristics of other derivative financial instrument if all following conditions are satisfied:

1) the contract corresponds to one of the following criteria:

a) the contract is admitted to trading on multilateral system in foreign state which provides accomplishment of functions of the controlled market, MTP or OTP;

b) terms of the contract provide possibility of its conclusion only in the controlled market, MTP or OTP, or on multilateral system in foreign state which provides accomplishment of functions of the controlled market, MTP or OTP;

c) the contract is identical to the contract which is admitted to trading on multilateral system in foreign state which provides accomplishment of functions of the controlled market, MTP or OTP, regarding the price, lot, the delivery date and other conditions;

2) the contract is standardized therefore the price, the delivery date and other conditions are established in it by the reference to the published prices, standard lots or standard delivery dates;

3) the contract (agreement) does not fall under the exceptions provided by part two of this Article.

Section II Securities

Article 8. Securities and their classification

1. Security is the document of the established form with the corresponding details certifying cash or other property right which determines relations of the issuer of security (person which issued security) and person having the rights to security and provides accomplishment of obligations on such securities, and also possibility of assignment of rights on security and is right on security to other persons.

2. Securities in the order of their placement or issue share on issued or not issued.

Issued securities are the securities certifying the identical rights of their owners within one issue of securities concerning person who undertakes the corresponding obligations (issuer).

Treat issued securities:

1) shares;

2) shares of corporate investment funds;

3) corporate bonds;

4) bonds of local loans;

5) government bonds of Ukraine;

6) bonds of international financial institutions;

7) deposit certificates of banks;

8) mortgage bonds;

9) certificates of funds of real estate transactions (further - certificates of FON);

10) investment certificates;

11) treasury obligations of Ukraine;

12) state derivatives;

13) option certificates;

14) share warrants;

15) credit notes;

16) depositary receipts.

3. Securities exist in electronic (electronic securities) and paper (paper securities) forms.

The electronic security is reflected in the form of accounting record in the account in securities in system of depositary accounting of securities.

Paper the security is drawn up on the material carrier as the document containing the name of type of security, and also details determined by the legislation.

4. Securities in form of release (issue) can be to bearer, nominal or order.

The rights to security and the rights on security which exists in paper form belong:

1) to the bearer of security (bearer security);

2) to person specified in security (personalized security);

3) to person specified in security who can exercise these rights or designate the order other authorized person (order security). At the same time such order (endorsement) can be complete (with indication of name of person to which the rights on such order security) or blank are transferred (without specifying of person to which the rights on such order security are transferred).

The rights to security and the rights on security which exists electronically belong to the account holder in securities, opened in depository institution, or to other person in the cases established by the legislation.

The issuer of bearer securities has no right from system of depositary accounting of securities of information on owners of such securities in any form, except the cases provided by the National commission on securities and the stock market.

The issuer of personalized securities has the right from system of depositary accounting of securities of information on owners of such securities in the form of the register of owners of personalized securities.

5. Order securities can exist only in paper form.

6. Issued securities can be in release form exclusively nominal or to bearer.

Personalized issued securities exist exclusively electronically.

Issued bearer securities can exist in paper and electronic forms. Issued bearer securities which exist in paper form can be immobilized - are transferred to electronic form of existence by deposition of such securities on accounts in securities in Central Securities Depository or in the National Bank of Ukraine according to the competence established by the Law of Ukraine "About depositary system of Ukraine" in the procedure established by the National commission on securities and the stock market. Issued bearer securities which exist electronically cannot be transferred to paper form.

Not issued securities can exist in paper or electronic form.

7. In Ukraine in civil circulation there can be such groups of securities:

1) share securities - the securities certifying participation of the owner of such securities (investor) in the authorized capital and/or the issuer's assets (including the assets which are in management of the issuer) also grant them to the owner (investor) the right to part of profit (income), in particular, in the form of dividends, and other rights established by the legislation, and also the prospectus or the decision on issue, and for securities of institutes of joint investment - the prospectus (the decision on issue) of institute of joint investment. Treat share securities:

a) shares;

b) investment certificates;

c) certificates of FON;

d) shares of corporate investment funds;

Debt securities - the securities certifying the relations of loan and providing obligation of the issuer or person who issued not issued security to pay 2) to certain time of means, to transfer goods or to provide services, and also other rights of the owner and the obligation of the issuer and persons providing providing on bonds. Treat debt securities:

a) corporate bonds;

b) government bonds of Ukraine;

c) bonds of local loans;

d) treasury obligations of Ukraine;

ґ) savings certificates of banks;

e) deposit certificates of banks;

e) bills of exchange;

є) bonds of international financial institutions;

3) mortgage securities - securities which release is provided with mortgage covering and which certify the right of owners to obtaining from the issuer of the means belonging to them. Treat mortgage securities:

a) mortgage bonds;

b) mortgages;

4) derivative securities - the securities certifying the owner's right in determined by the prospectus (the decision on issue of securities) in cases and procedure to demand from the issuer of acquisition or sale of underlying asset and/or realization established by the prospectus (the decision on issue of securities) it is right concerning underlying asset, and/or implementation of payment (payments) depending on value of basic indicator. Treat derivative securities:

a) option certificates;

b) share warrants;

c) credit notes;

d) depositary receipts;

ґ) state derivatives.

Requirements to derivative securities (except the state derivatives), and also procedure for their issue, accounting, the address, redemption and repayment are determined normative - legal acts of the National commission on securities and the stock market;

5) tovarorasporyaditelny securities - the securities granting to their holder authority to dispose, specified in these documents.

8. The state can place in the international markets of the capital of the bond of the external state loan of Ukraine and the state derivatives.

Article 9. Shares

1. The share is personalized security which certifies the property rights of its owner (shareholder) concerning joint-stock company including the right to part of profit of joint-stock company in the form of dividends and the right to part of property of joint-stock company in case of its liquidation, the right to management of joint-stock company, and also the non-property rights provided by the Civil code of Ukraine, this Law and the law which regulates question of creation, activities and termination of joint-stock companies.

The share is indivisible. The procedure for realization of the rights of co-owners of the share (shares) is determined by the Civil code of Ukraine and the law which regulates question of creation, activities and termination of joint-stock companies.

2. The shareholder private or public joint stock company has the privilege to share acquisition of additional issue.

Shareholder preemptive right is recognized:

1) shareholder right - the owner of common shares to acquire common shares in the course of issue by joint-stock company it is pro rata to share of the common shares owned by it in total quantity of the emitted common shares (except case of adoption by general shareholder meeting of the decision on non-use of such right);

2) shareholder right - the preferred shareholder to acquire in the course of issue by joint-stock company preferred shares of this or new class if shares of such class provide to their owners benefit concerning priority of receipt of dividends or payments in case of liquidation of society, in proportion to share of the preferred shares of certain class belonging to the shareholder in total quantity of preferred shares of this class (except case of adoption by general shareholder meeting of the decision on non-use of such right).

The procedure for implementation of the privilege to share acquisition of additional issue is established by the National commission on securities and the stock market.

3. Issuer of shares is only the joint-stock company. The procedure for adoption by relevant organ of joint-stock company of the decision on share issue is determined by the law which regulates question of creation, activities and termination of joint-stock companies.

Shares exist exclusively electronically.

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