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ORDER OF THE GOVERNMENT OF THE KYRGYZ REPUBLIC

of June 24, 2011 No. 344

About approval of the Regulations on depository activity

(as amended of the Order of the Government of the Kyrgyz Republic of 26.08.2014 No. 485)

According to the Law of the Kyrgyz Republic "About the security market" the Government of the Kyrgyz Republic decides:

1. Approve the enclosed Regulations on depository activity.

2. This resolution becomes effective after 15 days from the date of official publication.

Prime Minister

A. Atambayev

Approved by the Order of the Government of the Kyrgyz Republic of June 24, 2011 No. 344

Regulations on depository activity

1. General provisions

1. This Provision determines the legal basis of functioning of depositaries and establishes features of depository activity in the Kyrgyz Republic according to the Law of the Kyrgyz Republic "About the security market".

2. The relations arising in connection with implementation of depository activity are regulated by this Provision and other regulatory legal acts of the Kyrgyz Republic.

3. In this Provision the following basic concepts are used:

delivery of securities - assignment of rights on securities by the translations on custody accounts or their physical transfer;

the owner of securities - person to whom securities belong on the property right;

the contract for depositary servicing (further - the depositary agreement) - the contract between depositary and the depositor governing their relations in the course of depository activity;

the custody account - the set of entries in accounting registers of depositary providing registration of details of depositors, accounting of its valuable papers / money and valuable papers / money of his clients, and fixing of the rights affirmed by these securities;

internal documents of depositary - the documents approved by depositary on implementation of the depositary and accompanying it activities, the statutory rules and standards of conducting depository operations and their accounting containing, in particular;

storage of securities - depositary service in ensuring safety of the securities entrusted on storage;

the order to depositary - the document containing instructions to depositary and forming the basis for accomplishment of depository operation or group of the connected depository operations.

2. Requirements to depositaries

4. Only legal entities based on the corresponding license for the right of conducting professional activity on securities of authorized state body on the security market can perform depository activity.

5. Features of activities of depositary of investment fund are established by the Law of the Kyrgyz Republic "About investment funds".

6. Functions of depositary are:

1) storage of securities (documentary securities and certificates of securities) and money of depositors;

2) information transfer, the security connected with ownership, from the issuer (the holder of the register) to depositors/clients of depositors (further - the client) and from depositors (clients) to the issuer (the holder of the register) of securities;

3) at the request of the depositor receipt of the income on the securities which are kept in depositary with subsequent their transfer to cash accounts of depositors/clients;

4) encumbrance accounting (i.e. accounting of imposing of obligations on securities in case of their registration on the security) securities of depositors (clients) obligations, and also discharge;

5) execution of orders on transfer and receipt of securities and money of depositors (clients);

6) transfer of certificates of securities at the request of depositors (clients) to the third parties;

7) verification of certificates of securities on authenticity;

8) collection and transportation of securities;

9) retirement of certificates of securities in accordance with the terms of their address;

10) registration of transactions with securities;

11) implementation of activities as the nominee holder;

12) control of execution of orders on securities and money of depositors (clients);

13) servicing of the organizer of trade in the security market - implementation of transition of the rights to securities following the results of the biddings at the organizer of trade in the security market;

14) implementation of calculations for transactions with securities.

7. All types of service rendered by depositary to depositors (clients) are performed according to internal documents of depositary and the depositary agreement.

3. Conditions and procedure for activities of depositaries

8. All internal documents of depositary regulating professional activity shall correspond to regulatory legal acts of the Kyrgyz Republic.

9. The depositary shall provide integrity and security of system of accounting and the reporting under depository operations with securities and money.

10. Control of implementation of activities by depositary is made by authorized state body on the security market in the procedure established by regulatory legal acts of the Kyrgyz Republic.

11. Depositaries represent to authorized state body on the security market the reporting according to the procedure, established by regulatory legal acts of the Kyrgyz Republic.

12. Depositaries bear responsibility according to the legislation of the Kyrgyz Republic for violations of requirements of regulatory legal acts of the Kyrgyz Republic.

In case of identification of the facts of violation by depositary of requirements of regulatory legal acts of the Kyrgyz Republic the authorized state body on the security market takes measures in its relation according to the legislation of the Kyrgyz Republic.

4. Restrictions of activities of depositaries

13. On securities and money of depositors (clients) the depositary has no right:

- perform on its own behalf transactions, including mortgage transactions with securities. Depositaries can perform on its own behalf transactions, including mortgage transactions with securities of the depositor (client) based on the separate contract with the depositor (client);

- represent the interests of depositors (clients) at general meetings of shareholders of issuers of securities without power of attorney which is drawn up according to the legislation of the Kyrgyz Republic;

- provide with the securities and money of depositors (clients) accepted on storage own obligations or obligations of the third parties.

14. Depositaries have no right to make transactions with securities and money of depositors (clients) without their direct specifying given in writing according to the procedure, established by the depositary agreement.

15. On securities and money of depositors collection according to obligations of depositary cannot be turned.

5. Transaction types of depositary

16. All transactions rendered to depositors by depositary shall reflect the following:

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