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LAW OF TURKMENISTAN

of November 8, 2014 No. 139-V

About the security market

(as amended on 05-06-2021)

This Law governs the relations arising in case of issue and security circulation in Turkmenistan and is aimed at providing effective functioning of the security market, development of market economy of Turkmenistan.

Chapter I. General provisions

Article 1. The basic concepts used in this Law

1. In this Law the following basic concepts are used:

1) issue – issue of securities and their placement by the issuer to the first owners by the conclusion of the civil transaction;

2) issued securities – securities which are characterized by at the same time following signs:

a) affirm the property rights which are subject to the certificate, concession and realization with observance of form and procedure, established by this Law;

b) take place releases;

c) have equal amount and terms of realization of the rights in one release regardless of time of their acquisition;

3) the prospectus of the issue – the document containing information on the issuer, its financial condition, amount of issued securities and conditions of their release and also other data according to this Law;

4) securities – the documents certifying the property rights affirmed in them, concession and which realization are possible after their presentation. Securities can be nominal and to bearer;

Personalized securities - securities, transition of the rights to which and realization of the property rights affirmed by them require obligatory identification of the owner and registration of his name in the register of owners of securities;

Bearer securities – securities, transition of the rights to which and realization of the property rights affirmed by them do not require obligatory identification of the owner;

Investment (capital) security – the type of personalized security or the bearer security which is in circulation as means of investment and certifying property availability in the form of investment share, share or other interest in the capital of the legal entity;

5) the security market – set of the relations of the physical persons and legal entities connected with issue and security circulation;

6) security circulation – the conclusion of the civil transaction attracting transition of the property right to securities;

7) the owner of security – person to whom the security belongs on the property right or other corporeal right;

8) the documentary form of securities – form of securities in case of which property rights on securities are fixed on paper and the owner is established based on presentation of properly drawn up security or the certificate of security, or in case of deposition of the certificate, - based on record on the custody account;

9) paperless form of securities – the form of securities in case of which property rights on securities are fixed in the register of owners of securities and the owner is established based on entry in the specified register, or in case of deposition of security, - based on record on the custody account;

10) the certificate of securities – the document issued by the issuer to the owner of securities in confirmation of its rights to the number of securities specified in the certificate.

2. In this Law other concepts are used in the values determined by civil and other legislation of Turkmenistan, and also the relevant Articles of this Law.

Article 2. Legislation of Turkmenistan on the security market

1. The legislation of Turkmenistan on the security market is based on the Constitution of Turkmenistan and consists of this Law, other regulatory legal acts of Turkmenistan regulating questions of issue and security circulation and investing activities.

2. Issue and security circulation of joint-stock companies is performed according to the Law of Turkmenistan "About joint-stock companies" and this Law.

3. If the international treaty of Turkmenistan establishes other rules than provided by this Law, then rules of the international treaty are applied.

Article 3. Coverage of this Law

1. Operation of this Law extends to the relations arising in case of issue and market circulation of securities of the following securities:

1) shares;

2) bonds;

3) bills of exchange;

4) translated bank deposit certificates;

5) the derivative securities which are traded on the securities market.

2. Other types of the securities provided to issue and market circulation of securities of Turkmenistan can be determined by the Cabinet of Ministers of Turkmenistan.

3. Operation of this Law extends to activities of credit institutes as professional participants of the security market.

4. Operation of this Law does not extend to implementation of banking activities by credit institutes according to the license of the Central bank of Turkmenistan regarding release, purchase, sale, accounting, storage and other transactions with the securities performing functions of payment documents with the securities confirming attraction of money in deposits and on bank accounts with other securities, implementation of transactions with which does not require receipt of the license according to this Law, and also trust management of the specified securities under the contract with legal entities and physical persons.

Chapter II. State regulation of the security market

Article 4. Bases of state regulation of the security market

State regulation of the security market is performed on basis:

1) establishments of mandatory requirements to activities of members of the security market;

2) state registration of issue (additional issues) of securities, and also control of observance by issuers of the obligations provided by them;

3) licensing of professional activity in the security market;

4) certifications of specialists of the professional participant of the security market;

5) creations of system of protection of the rights of owners of securities and control of observance of their rights by issuers and professional participants of the security market;

6) counteractions of legalization of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction when implementing professional activity in the security market;

7) suppression of activities of persons performing activities in the security market without the corresponding license.

Article 5. The bodies performing state regulation of the security market

The bodies performing state regulation of the security market are the Cabinet of Ministers of Turkmenistan and the Ministry of Finance and Economy of Turkmenistan (further - authorized body).

Article 6. Competence of the Cabinet of Ministers of Turkmenistan

The Cabinet of Ministers of Turkmenistan in the field of the security market:

Determines 1):

a) single state policy;

b) new types of the securities provided to issue and market circulation of securities of Turkmenistan;

Approves 2):

a) state program of market development of securities;

b) rules of issue and address of government securities;

Establishes 3):

a) annual quotas and conditions of the admission to market circulation of securities of Turkmenistan of the securities issued by foreign issuers;

b) annual quotas of the admission to the request for limits of Turkmenistan of the securities issued by issuers of Turkmenistan taking into account obligations of Turkmenistan under interstate agreements;

4) makes the decision on release from state registration of prospectuses of the issue of the separate issues of securities realized by the closed subscription;

5) provides protection of the rights and legitimate interests of investors in the security market;

6) performs other functions within its competence.

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