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Ministry of Justice of Ukraine

January 14, 2021

No. 62/35684

DECISION OF THE NATIONAL COMMISSION ON SECURITIES AND STOCK MARKET OF UKRAINE

of November 3, 2020 No. 640

About approval of Requirements (rules) of implementation of activities for the securities trading: broker activities, dealer activities, underwriting, securities management

(as amended on 11-03-2021)

According to Item 3 parts one and to Items 1, 27 parts two of Article 7, to Item 13 of article 8 of the Law of Ukraine "About state regulation of the security market in Ukraine", Article 17, parts one of article 27 of the Law of Ukraine "About securities and the stock market", to Items 1, 2 parts three of article 7 of the Law of Ukraine "About financial services and state regulation of the markets of financial services", for the purpose of enhancement of requirements to procedure by dealers in securities of professional activity in the stock market (security market) - activities for the securities trading and assistance of their adaptation to international standards the National commission on securities and the stock market RESHILA:

1. Approve Requirements (rule) of implementation of activities for the securities trading: broker activities, dealer activities, underwriting, the securities management (further - Requirements) which are applied.

2. To dealers in securities to bring the activities and internal documents into accord with Requirements no later than 60 days from the date of entry into force of this decision.

3. To department of methodology of regulation of professional participants of the security market () provide Kurochkin I.:

submission of this decision on state registration in the Ministry of Justice of Ukraine;

promulgation of this decision on the official website of the National commission on securities and the stock market.

4. This decision becomes effective since July 1, 2021, but not earlier than day of its official publication.

5. Control over the implementation of this decision to assign to the member of the National commission on securities and the stock market Tarabakin D.

Commission chairman

T. Hromayev

Approved by the Decision of the National commission on securities and the stock market of Ukraine of November 3, 2020 No. 640

Requirements (rule) of implementation of activities for the securities trading: broker activities, dealer activities, underwriting, securities management

I. General provisions and determinations of terms

1. These Requirements establish requirements to the organization of implementation by dealers in securities (further - dealers) professional activity in the stock market (security market) - activities for the securities trading (further - professional activity), transactions and implementation of financial instrument transactions, stipulated by the legislation in activities of the dealer, the organization of internal accounting of the dealer (further - internal accounting), and also fundamental obligations of the dealer.

2. Dealers, including their branches and other separate divisions, shall adhere to these Requirements and other regulatory legal acts of the National commission on securities and the stock market establishing features of implementation by dealers of separate transactions concerning financial instruments, during transactions, connected with acquisition, the termination, transition of the property rights to financial instruments.

3. In these Requirements the stated below terms are used in such value:

the client's assets - money and/or financial instruments which are considered in internal accounting of the dealer on the customer account and shall be enlisted in this respect, minus means and/or financial instruments which shall be paid and/or charged off this account;

remuneration - means all payment methods or the pecuniary and/or pecuniary benefits provided directly or indirectly by the dealer to the corresponding persons by provision of investment services to clients;

the interested person - any of the listed persons concerning the dealer:

person who is part of management or is head of the structural unit;

person which is the shareholder (participant);

the worker, and also any other physical person of whose services disposes and which services are controlled by the state and who is involved in provision by the dealer of investment services and implementation of professional activity;

internal information - internal information includes the following types of information:

information of exact nature which was not promulgated which concerns directly or indirectly one or several issuers / faces who issued the financial instrument or the parties of terminal contracts (further - suppliers of financial instruments) or one or several financial instruments and which in case of its promulgation would perform considerable influence on the prices of such financial instruments or on the prices of the corresponding derivative financial instruments;

concerning commodity derivatives - information of exact nature which was not promulgated which concerns directly or indirectly one or several such derivatives or which concerns directly relevant contracts for the available goods and which in case of its promulgation would perform considerable influence on the prices of such derivatives or the relevant contracts for the available goods and if it is about information which disclosure is expected or it is provided according to the legislation, stock exchange rules, the agreement, practice or custom, - on the corresponding markets of commodity derivatives or on the markets of the available goods;

for persons, representatives to execute orders concerning financial instruments, internal information is understood as information transferred by the client or which concerns the postponed customer orders concerning financial instruments which has exact nature, concerns directly or indirectly one or several suppliers of financial instruments or one or several financial instruments and which in case of its promulgation would perform considerable influence on the prices of such financial instruments, on the prices of the relevant contracts for the available goods or on the prices of the corresponding derivative financial instruments;

the customer order - the order (the order, the order) of the client to the dealer on the conditions established by the client to provide certain type investment service with certain financial instruments based on the general agreement;

investment council - provision by the dealer of personal recommendations to the client on its request or on own initiative concerning one or several agreements, including corporate transactions, concerning financial instruments;

investment services - services in the conclusion by the dealer of civil agreements of rather financial instruments on its own behalf either on behalf of the client at own expense or for customer account, on own initiative or under the relevant contract with the client or by its order, concluded when implementing professional activity, and/or implementing actions or rendering the services connected with such services which, in particular, include rendering consulting services, investment councils of rather financial instruments, provision of loan of financial instruments, transfer of accomplishment of customer orders according to which the dealer acts concerning it as the broker, to other dealer;

the investment recommendation - information which directly, or indirectly comprises the recommendation or the offer of investment strategy which directly or indirectly concerns one or several financial instruments or their suppliers, including any judgment of rather current or future value or price of the tools intended for distribution among certain or uncertain group of people;

investment research - the investment recommendation concerning which the following conditions are satisfied:

researches or information are designated or described as investment research or similar terms, or otherwise provided as objective or independent explanation of subject of the recommendation containing in such research or information;

if such recommendation was made by the dealer to the client, it will not be considered as provision to him investment council;

foreign investment firm - the foreign financial institution registered in the state which is the member of the European Union and/or Groups of development of financial measures of anti-money laundering (FATF), or Committee of experts of the Council of Europe according to measures of counteraction to washing of means and to financing of terrorism (MONEYVAL) (except the states which perform the armed aggression against Ukraine in the value given in article 1 of the Law of Ukraine "About defense of Ukraine" and/or actions of which create conditions for emergence of armed conflict, use of the armed force against Ukraine), which according to the legislation of such state performs activities for rendering investment services based on corresponding license(s) (permission(s)) issued (issued) authorized body this state;

komplayens - the dynamic, systematic internal process regulated by internal documents of the dealer aimed at providing:

descriptions of all internal processes connected with implementation of professional activity in the stock market;

compliance of the internal documents describing the internal processes connected with implementation of professional activity in the stock market, to requirements: legislations in the security market, standards, rules and other internal documents of self-regulatory organization which member is the dealer, stock exchange rules which member such dealer is or on which its financial instruments, are admitted to trading and the accepted business strategy (business plan);

accomplishment by workers of the dealer of requirements of its internal documents describing the internal processes connected with implementation of professional activity in the stock market;

the client - physical person or legal entity (the legal entity - the nonresident) to which the dealer provides investment services;

the market maker - the dealer who based on the agreement on accomplishment of functions of the market maker signed with stock exchange or with stock exchange and the issuer of financial instruments performs on permanent basis from own name for the account and on independently determined prices of transaction, provided by the agreement, way of submission of offers to make the transaction concerning the financial instruments admitted to trading at this exchange;

the marginal transaction - purchase and sale of financial instruments which is performed by the dealer based on the customer order if at the time of the conclusion of the purchase and sale agreement of cash amount or the number of financial instruments, data on which are considered in internal accounting of the dealer on the customer account, taking into account requirements and obligations for delivery and/or receipts of money and/or financial instruments under earlier signed agreements, is not enough for obligation fulfillment under such agreement, and accomplishment of the obligation (calculation) under this agreement before other agreement party is performed by the dealer (broker) with the subsequent settlement (execution) by the client (consignor) of obligations to the dealer according to conditions of the general agreement;

the reliable carrier - any data carrier which allows the client to save information addressed personally to this client with possibility of access to it for further use during the period of time sufficient for the purposes of this information and also allows to reproduce the saved information without changes;

without delay - the shortest time during the working day in which there shall be corresponding actions, from the moment of approach of the bases for their implementation, determined by internal documents of the dealer;

the nonprofessional client - the client who is not professional client or was not recognized as the professional dealer in the client;

investment objects - financial instruments;

objects of management - the financial instruments and means intended for investment into the financial instruments transferred to the control in case of the conclusion of the agreement on management, and also financial instruments and means, received by the founder of management in connection with execution managing agreements on trust management;

repo operation - purchase transaction (sales) of financial instruments with the obligation of their return sale (purchase) through certain term at previously agreed price which is performed on the basis of the single repurchase agreement;

financial instrument transactions - making by two or more parties of the coordinated actions directed to acquisition, change or the termination of the civil laws and obligations (transaction on financial instruments) connected with financial instruments, and also obligatory implementation of the actions approved by the parties directed to accomplishment of obligations which resulted from making of such transaction, and/or the rights directed to realization provided by such agreement;

the personal transaction - transaction concerning financial instruments, carried out by the corresponding person, or in its interests, in any of the following cases:

transaction concerning financial instruments is made within execution by such persons of the professional obligations;

transactions it is performed at the expense of any of the following persons:

corresponding person;

any person with whom the corresponding person has family relations;

person concerning whom the corresponding person has the direct or mediated material interest in result of transaction, in addition to receipt of the commission for its making;

persons performing executive functions (management) - 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 dealer, in particular, responsible for realization of policy on provision by the dealer of services to clients, and accountable on this matter to the supervisory board;

person with whom the corresponding person has family relations - any of the listed persons:

person who is married to the corresponding person or person who jointly lives, connected by general life has the mutual rights and obligations with the corresponding person, but is not married to it;

the own child or the stepson or the stepdaughter of the corresponding person who are on content of the corresponding person;

any other close face of rather corresponding person who jointly lives is tied by general life, has the mutual rights and obligations with the corresponding person, during one and over a year for date of the personal agreement;

the client's assessment - provided by internal documents of the dealer procedure and procedures of obtaining and information processing from the client for the purpose of the evaluating his competence, experience and knowledge necessary for transactions or for provision of certain services, for receipt of the conclusion about capability of the client to make own investment decisions and to estimate the personal risks connected with such transactions or services;

the acceptable partner - legal entities (legal entities - nonresidents) to whom the dealer provides investment services which international financial institutions, foreign states and their Central Banks, the state of Ukraine on behalf of appropriate subjects of management of objects of state-owned property, professional participants of the security market, banks and insurance companies, foreign investment firms, and also other legal entities who are recognized internal documents of the dealer as acceptable partners according to these Requirements treat;

the professional client - the client who has ability, experience and knowledge in the field of the stock market (security market), sufficient for adoption of investment decisions by it for the purpose of transactions on financial instruments;

"suspicious" transaction - the transaction concerning financial instruments owing to which making there will come or can come violation of the law of Ukraine to which, in particular, the manipulation the prices in the security market or the conclusion of contracts with use of insider information belongs;

the software module - the specialized software product including placed in the hardware-software circle of the wireless electronic device of the client of the dealer who performs function of means of identification and can provide possibility of the conclusion of contracts between the client and the dealer, and also signing and the direction by the client to the dealer of orders who is used in systems of remote customer service of the dealer and corresponds to the regulatory legal act of the National commission on securities and the stock market which determines requirements to the software products used in the stock market and also is included in the list of software products in the stock market which is conducted by the National commission on securities and the stock market according to the regulatory legal act of the National commission on securities and the stock market concerning procedure for accounting of software products in the stock market, by means of which transactions concerning financial instruments in the cases provided by Rules, according to the procedure, established by internal documents of such dealer are made;

the straight line electronic access to the exchange biddings - set of procedures according to which the dealer who is the member of stock exchange gives the chance to clients to use the remote access for the bidder to electronic trading system of this stock exchange, allows clients by means of special software of the member of stock exchange (direct market access) or without use of special software of the member of stock exchange (the sponsored access), to give, change or delete requests which consequence of accomplishment the conclusion of exchange contracts according to stock exchange rules is, to obtain information which is opened by stock exchange and to perform other actions necessary for participation in the biddings at this exchange;

officials of the dealer - the chairman and members of the supervisory board, the chairman and members of collegiate executive body (the chairman of sole executive body and its deputies), the corporate secretary, the chief accountant, the chairman and members of other bodies of the professional participant whose education is provided by its charter;

the prospective client - physical person or legal entity (the legal entity - the nonresident) which addressed the dealer with intention to receive investment service, but did not establish with it business relations by the conclusion of the relevant agreement yet;

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