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LAW OF UKRAINE

of October 30, 1996 No. 448/96-BP

About state regulation of the security market in Ukraine

(as amended on 17-06-2020)

This Law determines the legal basis of implementation of state regulation of the security market and the state control of release and security circulation and their derivatives in Ukraine.

Article 1. Determination of terms

For the purposes of this Law the stated below terms are used in the following value:

state regulation of the security market - implementation by the state of complex measures for streamlining, control, supervision of the security market and their derivatives and to prevention of abuses and violations in this sphere;

derivative securities - securities, the mechanism of release and which addresses it is connected with the right to acquisition or sale during the term determined by the agreement (contract), securities, other financial and/or commodity resources;

professional participants of the security market - persons who perform professional activity in the security market;

determination of credit rating (rating) is the activities for rendering professional services in the security market directed to determination of creditworthness of subject to rating which can be carried out by rating agency;

the credit rating is conditional expression of creditworthness of subject to rating in general and/or its separate debt obligation on national scale of credit ratings;

the national rating scale (further - the National scale) the scale divided into certain groups of levels and levels each of which characterizes the borrower's capability timely and in full to pay interests and the main amount on the debt obligations, and also its solvency. The national scale is used for assessment of credit risk of the borrower - local government body, the subject of managing and separate debt instruments - bonds, mortgage securities, loans;

rating assessment of the issuer - characterizes the level of capability of the issuer of securities timely and in full to pay interests and the main amount on debt obligations of rather debt obligations of other borrowers;

rating securities valuation of the issuer - characterizes the level of capability of the borrower (issuer) timely and in full to serve obligations on securities;

corporate management - system of the relations which determines rules and procedures of decision making concerning activities of economic society and control, and also distribution of the rights and obligations between bodies of society and its participants concerning management of society;

system of depositary accounting of securities - set of records about securities (type, nominal cost and quantity, nature of the registered restrictions in the address or realization of the rights on securities), their issuers, owners of the personalized securities authorized by them persons, managers, pawnbrokers, other persons given the appropriate rights concerning the securities containing information which gives the chance to identify the called persons, and also other stipulated by the legislation information;

system of the register of owners of personalized securities (system of the register) - the data set providing identification of the owners registered in this system, nominee holders and the issuer and also the personalized securities registered on their name, accounting of all changes of information of rather above-stated persons and securities, obtaining and provision of information to these persons and creation of the register of owners of personalized securities.

The terms "person performing managerial functions", "the offerer of securities" and "securities prospectus" are used in this Law in the value given in the Law of Ukraine "About securities and the stock market".

The terms "subjects of system of accumulative provision of pensions", "investors", "participants" are used in the value given in article 3 of the Law of Ukraine "About obligatory national pension insurance".

The term "nominee holder" is used in this Law in the value given in the Law of Ukraine "About depositary system of Ukraine".

The term "consumer of financial services" is used in this Law in the value given in the Law of Ukraine "About financial services and state regulation of the markets of financial services".

Article 2. Purpose of state regulation of the security market

State regulation of the security market is performed on purpose:

realization of single state policy in the sphere of release and security circulation and their derivatives;

creations of conditions for effective mobilization and placement by members of the security market of financial resources taking into account interests of society;

receipts by members of the security market of information on conditions of release and security circulation, results of financial and economic activities of issuers, amounts and nature of security transactions and other information influencing pricing in the security market;

providing equal opportunities for access for issuers, investors and intermediaries to the security market;

guaranteeing property rights to securities; protection of the rights of stock market participants (including consumers of financial services) rather financial services which are provided by persons who perform professional activity in the security market; integration into the European and world stock markets;

observance by members of the security market of requirements of acts of the legislation;

prevention of monopolization and creation of conditions of development of fair competition in the security market;

control of transparency and openness of the security market.

Article 3. Forms of state regulation of the security market

State regulation of the security market is performed in the following forms:

adoption of acts of the legislation concerning activities of members of the security market;

regulation of release and security circulation, rights and obligations of members of the security market;

issue of licenses for implementation of professional activity in the security market and ensuring control of such activities;

prohibition and suspension for certain term (up to one year) professional activity in the security market in the absence of the license for these activities and accountability for implementation of such activities according to the current legislation;

registration of issues of securities, reports on results of securities placement and approval of securities prospectuses;

control of observance by issuers of order of registration of issue of securities, report on results of securities placement and approval of the securities prospectus;

creation of system of protection of the rights of investors and control of observance of these rights by the issuers of securities and persons performing professional activity in the security market;

control of the accuracy of the information provided by the issuers and persons performing professional activity in the security market, to monitoring bodies;

establishment of rules and standards of implementation of transactions in the security market and control of their observance;

prudentsionny supervision of professional participants of the stock market within activities which are performed by such participant based on the issued National commission on securities and the stock market of the license.

control of systems of pricing in the security market;

control of activities of persons serving release and security circulation;

holding other actions for state regulation and control of release and security circulation.

The principle of acquiescence is not applied when implementing state regulation of the security market by the National commission on securities and the stock market only in the cases established by the law.

Article 4. Licensing of professional activity in the security market and activities in system of accumulative provision of pensions 

The national commission on securities and the stock market in the procedure established by it grants licenses for such types of professional activity in the security market and activities in system of accumulative provision of pensions:

1) broker activities;

2) dealer activities;

3) underwriting;

4) securities management;

5) activities for asset management;

6) activities for property management for financing of construction objects and/or implementation of real estate transactions;

7) activities for management of mortgage covering;

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