Document from CIS Legislation database © 2003-2020 SojuzPravoInform LLC

LAW OF THE KYRGYZ REPUBLIC

of July 24, 2009 No. 251

About the security market

(as amended on 08-05-2019)

Accepted by Jogorku Kenesh of the Kyrgyz Republic on June 25, 2009

Chapter 1. General provisions

Article 1. Sphere of regulation of this Law

1. This Law governs the relations, connected:

- with public offer and issue of securities;

- with ownership and security circulation;

- with activities of professional participants and other members of the security market;

- with supervision in the security market.

2. This Law does not regulate issue of government securities, municipal securities, securities of National Bank of the Kyrgyz Republic.

The address of government securities, municipal securities, securities of National Bank of the Kyrgyz Republic on the stock exchange is regulated according to this Law and other regulatory legal acts of the Kyrgyz Republic.

3. Security circulation of nonresident issuers of the Kyrgyz Republic in the territory of the Kyrgyz Republic is regulated by this Law, other laws and regulatory legal acts of the Kyrgyz Republic adopted according to this Law and other laws.

Article 2. Legislation on the security market

2. The international contracts and agreements which came in the procedure established by the law into force which participant is the Kyrgyz Republic and also the conventional principles and rules of international law the regulating questions of the security market, are part of the laws of the Kyrgyz Republic.

Article 3. The terms and determinations used for the purposes of this Law

Underwriting - carrying out by the underwriter subscription to securities or security sales, issued in case of public issue, based on the agreement with the issuer of these securities.

The underwriter is the professional participant of the security market who signed the contract with the issuer of securities with the obligation to carry out subscription to securities or security sale, the securities issued in case of public issue, or to provide subscription to securities or their purchase by other persons. The obligation can be assigned by the contract between the issuer of securities and the underwriter for the underwriter to be signed on all securities or their part or to purchase all securities or their part which will not be widespread on subscription or is purchased following the results of public issue, to the final date established for public subscription.

The affiliate - any physical person or legal entity which directly or indirectly can influence the made decisions of other physical person or legal entity in force:

- the signed agreement;

- ownerships of the large block of shares (share);

- the fact that it is official of the legal entity;

- that physical person or legal entity concerning which other physical person or legal entity can exercise control on the above-stated bases.

The owner of controlling stock - physical person or legal entity which directly or indirectly holds controlling stock of joint-stock company on one of the following bases:

- person is owner of securities;

- person has rights to perform or control implementation of voting power according to shares;

- person has rights to alienate shares or controls the right on alienation of the share.

The owner of the large block of shares - physical person or legal entity which directly or indirectly owns the large block of shares of joint-stock company on one of the following bases:

- person is owner of securities;

- person has rights to perform or control implementation of voting power according to shares.

The secondary security market - the relations developing in the course of the address before issued securities between subjects of the security market, except for the relations in the primary security market.

Delisting - the procedure of exception of securities of the special list of stock exchange. Rules of delisting are established by stock exchange.

The official - the chairman, the board member, the head and the member of executive body of the issuer or the professional participant of the security market, and also person recognized by the official according to the legislation of the Kyrgyz Republic regulating activities of the commercial organizations.

The investor - the physical person or legal entity performing investment of capital in securities.

The institutional investor - the legal entity or mutual investment fund raising funds of physical persons and legal entities for the purpose of implementation of investments into investment assets.

The individual investor - the investor who is not the institutional investor.

Investment assets - the money, securities, other assets determined as investment assets by regulatory legal acts of the Kyrgyz Republic state body.

The skilled investor - the professional participant of the security market, physical person or legal entity - the nonresident of the Kyrgyz Republic, and also the institutional or individual investor whose one-time amount of money transferred for transactions to the professional participant of the security market of the Kyrgyz Republic is determined by the Government of the Kyrgyz Republic.

Features of release and the security circulation intended only for skilled investors are determined by the Government of the Kyrgyz Republic.

The client of managing company - the institutional investor and/or the individual investor.

Confidential information - any information which is not public (open) which disclosure can have significant effect on market price of the securities issued by the issuer and transactions with them, on the issuer and the activities performed by it, and also other persons whom this information concerns.

Controlling stock - more than 50 percent of the common shares issued by joint-stock company.

The security quotation - the price offered by the bidder on purchase and (or) security sale declared in trade system of stock exchange.

The large block of shares - 5 and more percent of the common shares issued by joint-stock company.

Listing - the procedure of inclusion of securities in the special list of stock exchange which correspond to the special criteria established by stock exchange. The minimum requirements to listing are established by regulatory legal acts of the Kyrgyz Republic state body.

The nominee holder - the person who is not the owner of security, representing the interests of the owner or other holder concerning its securities and enabling the realization of property rights on securities on its own behalf and at the request of the owner or other holder based on the agreement.

Security circulation - making of civil security transactions in the secondary market.

Public information in the security market - information which is subject to disclosure according to this Law.

The primary security market - the relations developing in the course of securities disposal by the issuer to the first owners by the conclusion of civil transactions.

The personal offer - the offer on placement or secondary market sale of securities to the group of people which structure is in advance determined.

Bond redemption - actions of the issuer for retirement of the placed bonds by payment of remuneration and nominal value (without the purpose of the subsequent sale) bonds or its convertings in the share (shares) of the same issuer according to the procedure, established by the prospectus of bond issue.

The prospectus - the document published by the issuer within public offer of securities and containing the information about the issuer, its financial condition issued (issued) it securities.

Derivative securities - securities, the mechanism of release and which addresses it is connected with the right to acquisition or sale throughout the term established by the agreement of underlying asset or with property right (obligation) arising in connection with the change in price of the underlying asset which is the cornerstone of such security. Types of derivative securities, conditions of their release and the address, and also the requirement to their underlying asset are established by the Government of the Kyrgyz Republic.

The professional participant of the security market - the legal entity having the license for implementation of one or several types of professional activity in the security market.

The public company - the issuer whose securities 50 and more persons, and/or the issuer who performed or performing public offer of securities own. Open joint stock companies are the public companies.

Public offer - the offer on placement or security sale made to any physical persons and legal entities as what method they would not be chosen, including which is followed by distribution of the announcement, prospectus or commitment form, except for:

- personal offer;

- security sales in the course of implementation of insolvency proceeding according to the legislation of the Kyrgyz Republic;

- security sales in case of executive judicial proceedings according to the legislation of the Kyrgyz Republic.

Public issue of securities is the issue of securities which is followed by public offer of securities.

Securities placement - securities disposal of the issuer to the first owners by making of civil transactions.

The regulated subject of the security market - in the security market is meant the regulated subject:

- public company;

- professional participant of the security market;

- self-regulatory organization of professional participants of the security market.

Connected person of physical person or legal entity:

in case with physical person:

- close relative of this physical person;

in case with the legal entity:

- holder of the large block of shares (shares, shares) legal entity;

- close relative of the founder or owner of the large block of shares (shares, shares) legal entity;

- official of the legal entity, and also official of subsidiary or main society of the legal entity;

- close relatives of the official;

- affiliated, dependent, main society.

Trade system of stock exchange - set of the computing means, the software, databases, telecommunication means and other equipment providing possibility of the conclusion of transactions, maintenance, storage, processing and disclosure of information necessary for making and execution of security transactions.

Managing company - the professional participant of the security market performing on its own behalf in interests and for customer account of managing company activities for trust management of investment assets.

Private issue of securities is issue of securities during which the issuer issues and places the securities by the personal offer.

The financial instrument - securities, money in national and foreign currency and other investment assets allowed to the address in the territory of the Kyrgyz Republic.

The stock exchange - the professional participant of the security market created in form of business of joint-stock company, rendering the services which are directly promoting transactions with securities, and information on transactions and trading sessions reveals publicly by the notification of bidders about the place and time of tendering, the list and the security quotation admitted to trading on the stock exchange, results of trading sessions.

Securities:

- shares, bonds;

- the securities issued by the state;

- derivative securities;

- share in mutual investment fund.

The security certifies the equal rights of their owners in relation to the issuer within one release.

The expert - the physical person having special knowledge, qualification and experience in certain area and attracted by the regulated subject for the purpose of provision of authoritative opinion concerning activities of the regulated subject. The concept "expert" also includes the auditor, the independent appraiser, but is not limited to them.

The expert organization - the legal entity having special knowledge and experience in certain area and attracted by the regulated subject for the purpose of provision of authoritative opinion concerning activities of the regulated subject. The concept "expert organization" includes audit company, the company performing estimative activities, but is not limited to them.

The issuer - the legal entity incurring on its own behalf obligations to owners of securities on implementation of the rights affirmed by these securities.

Issue of securities is set of the consecutive actions necessary for securities placement.

Execution of stock exchange transaction - implementation of calculations for the security transaction concluded on the stock exchange by execution by the parties of the obligations following from the transaction.

Pension assets - set of assets (money) which are created at the expense of pension deposits and the part of the income from their placement considered on retirement accounts.

The allocated assets of Islamic special finance company - the property and right to claim acquired by Islamic special finance company, receipts on them.

The holder of Islamic securities - the physical or legal entity owning at least one Islamic security providing him percent in the established property or business of the issuer, and thus having rights and obligations established by regulatory legal acts of the Kyrgyz Republic.

Trust management of Islamic securities - implementation by the legal entity on its own behalf for remuneration (during certain term) trust management of the Islamic securities transferred to it to ownership.

The investment project - the complex of actions and documents providing practical realization of the investments before achievement of the set result for certain period of time performed based on the investment agreement.

Islamic securities - the securities issued on the basis of the Islamic principles of financing (standards of Sharia), certifying the property right to indivisible share in the established property or business of the issuer.

Islamic special finance company - the legal entity created by originator, performing release of Islamic securities according to regulatory legal acts of the Kyrgyz Republic.

Originator - the legal entity, assets or business of which are transferred based on the purchase and sale agreement of Islamic special finance company and/or which is founder of Islamic special finance company.

Repayment of Islamic securities - payment in the terms established by the prospectus of release of Islamic securities at the expense of the allocated assets, amounts of money, the respective share pro rata to ratio of quantity of the Islamic securities belonging to the holder to total quantity of Islamic securities of this release, according to the regulatory legal acts of the Kyrgyz Republic regulating the security market.

The representative of holders of Islamic securities - the professional participant of the security market who is acting for the benefit of holders of Islamic securities based on the contract signed with the issuer.

Reserve fund - the means intended for covering of the losses resulting from investment of the money received from placement of Islamic securities, procedure for forming and which uses it is determined by the prospectus of release of Islamic securities.

Sharia council - the independent body confirming compliance of issue, the address and repayment of Islamic securities to the Islamic principles of financing, created according to requirements of regulatory legal acts of the Government of the Kyrgyz Republic.

Article 4. Documentary and bank entry securities

1. The documentary security represents the paper document of the established form. Details of the securities issued in documentary form are established by regulatory legal acts of the Kyrgyz Republic.

In documentary form only bearer securities can be issued.

2. Bank entry securities - personalized securities on which rights make sure entry on the account of the register of security holders or record on the custody account at depositary.

Chapter 2. State regulation of the security market

Article 5. Authorized state body on regulation of the security market

1. Authorized state body on regulation of the security market is the state body which pursues single state policy in the security market, exercises regulation and supervision of activities of regulated subjects, provides protection of the rights of investors, and also performs other tasks determined by the legislation of the Kyrgyz Republic.

2. The procedure for activities of authorized state body on regulation of the security market is established by this Law and the legislation of the Kyrgyz Republic on authorized state body on regulation of the security market.

Article 6. Disclosure by the staff of authorized state body on regulation of the security market of information on availability of private interests

1. The staff of authorized state body on regulation of the security market shall open any private interests which they have in business activity in the Kyrgyz Republic or beyond its limits, in the securities issued in the Kyrgyz Republic or beyond its limits. Disclosure of private interests is performed within 2 working days from the moment of emergence of private interest.

2. The employee of authorized state body on regulation of the security market shall not take part in consideration and/or decision making on questions to which it has private interest.

3. The employee of authorized state body on regulation of the security market is recognized having private interest if subject of case in point is the close relative or the affiliate of the employee, or other financial interests have the legal entity in whom the employee or his close relative, or the affiliate of the employee act as owners of the large block of shares (shares).

Article 7. Maintaining confidentiality by the staff of authorized state body on regulation of the security market

1. The authorized state body on regulation of the security market has the right to open confidential information in the cases provided by the laws of the Kyrgyz Republic.

2. The staff of authorized state body on regulation of the security market shall observe confidentiality of any information on persons and/or other questions to which they have access in course of execution of the service duties.

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