PRESIDENTIAL DECREE OF THE RUSSIAN FEDERATION

of September 16, 1997 No. 1034

About providing the rights of investors and shareholders to securities in the Russian Federation

For the purpose of protection of the rights of investors and shareholders in the stock market of Russia, including the state as owner on blocks of shares of the privatized companies first of all having strategic importance for ensuring economic safety of the Russian Federation I decide:

1. Agree with government proposal of the Russian Federation about creation of the national depositary system including the Central depositary - the Central fund of storage and information processing of the stock market (further hereinafter is referred to as - the Central depositary), and also the organizations having the licenses of professional participants of the security market for implementation of depository activity granted by the Federal Commission for the Securities Market (further hereinafter are referred to as - licenses of the Federal Commission for the Securities Market), and working according to standards of national depositary system.

Determine that the national depositary system performs functions of centralized system of storage of securities and accounting of the rights to them.

2. Determine that the Central depositary is the federal state unitary enterprise founded on the right of economic maintaining which director is appointed to position and is dismissed by the decision of the Government of the Russian Federation.

Determine that the Central depositary is not subject to privatization and privatization.

3. Assign the solution of the following main objectives to the Central depositary:

collection, state registration and storage of information arriving from the issuers, registrars and the organizations having the license of the Federal Commission for the Securities Market and which are part of national depositary system;

provision of the documents confirming the rights to securities which are stored in national depositary system or it is right on which are considered in national depositary system, on requests of courts, federal bodies of the government, public authorities of subjects of the Russian Federation, local government bodies, and also owners of securities.

Determine that the Central depositary cannot be engaged other, except the provided this Decree, professional activity in the security market, and also to act as the nominee holder of securities.

4. Determine that the introduction in structure of national depositary system of the organizations having the license of the Federal Commission for the Securities Market is performed based on their statements. Along with the statement standards of activities of the relevant organization, its statutory documents, the copy of the license of the Federal Commission for the Securities Market, the decision of the supreme body of the organization on the introduction are represented to structure of national depositary system, and also the contract with the Central depositary on interaction as a part of national depositary system.

5. Determine that the form of the agreement of the Central depositary and the organization having the license of the Federal Commission for the Securities Market of interaction as a part of national depositary system affirms the Government of the Russian Federation.

The central depositary cannot refuse the conclusion with the organization having the license of the Federal Commission for the Securities Market, the agreement on interaction as a part of national depositary system if it corresponds to the form established by the Government of the Russian Federation.

6. The decision on acceptance of the organizations having the license of the Federal Commission for the Securities Market in structure of national depositary system is accepted by the Federal Commission for the Securities Market no later than two months from the date of filing of application. The bases for refusal in acceptance of the organizations in structure of national depositary system are:

discrepancy of standards of organization activity to standards of national depositary system;

non-presentation of documents, necessary for adoption of the relevant decision.

7. The decision on exception of the organization of structure of national depositary system is made by the Government of the Russian Federation in case of deprivation of the organization of the license of the Federal Commission for the Securities Market, violation of standards of national depositary system by the organization or agreement cancelation with the Central depositary on interaction as a part of national depositary system on the bases established by the Government of the Russian Federation.

8. Determine that provision by the Central depositary of the documents confirming the rights to securities which are stored in national depositary system or it is right on which are considered in national depositary system, on requests of courts, federal bodies of the government, public authorities of subjects of the Russian Federation, local government bodies, and also owners of securities it is performed according to the procedure, established by the Government of the Russian Federation.

The documents issued in accordance with the established procedure by the Central depositary do not require the notarial certificate or state registration for confirmation of the rights to securities. The specified documents can be challenged judicially.

Provision by the Central depositary of the documents confirming the rights to securities which are stored in national depositary system or it is right on which are considered in national depositary system, to other legal entities and physical persons it is performed based on the contract and with observance of requirements of the legislation of the Russian Federation on the state, commercial and protected by the law other secret.

9. Determine that till January 1, 1998 the state bodies and the organizations providing storage of the blocks of shares of the privatized companies which are in state-owned property and (or) the performing functions of the owner, managing (trustee) concerning the specified blocks of shares or owning them under the agreement of pledge or other obligation shall transfer the specified blocks of shares to storage to one of the organizations having the license of the Federal Commission for the Securities Market and being part of national depositary system and to register the rights to these blocks of shares in this organization.

10. To the government of the Russian Federation:

take necessary measures for the organization of activities of the Central depositary;

approve in a month the charter of the Central depositary; approve in a month form of the agreement of the Central depositary and the organization having the license of the Federal Commission for the Securities Market of interaction as a part of national depositary system, having provided in it obligations of the parties on observance of standards of national depositary system, measure for joint financing of activities of national depositary system, including risks insurance, and also agreement cancelation conditions;

create in 2-month time the supervisory board of the Central depositary from among the representatives of public authorities of the Russian Federation and the organizations having the license of the Federal Commission for the Securities Market and being part of national depositary system;

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