LAW OF THE REPUBLIC OF MOLDOVA

of October 3, 2016 No. 234

About Single Central Securities Depository

This organic law is adopted based on provisions of article 106-1 of the Constitution by acceptance on itself the Government of responsibility to Parliament.

This law partially shifts Regulations (EU) No. 909/2014 of the European parliament and Council of July 23, 2014 about enhancement of payment under securities in the European Union and about Central Securities Depositories to which changes are made to directives 98/26/CE and 2014/65/ES and to Regulations (EU) No. 236/2012, published in the Official magazine of the European Union by L 257 of August 28, 2014.

Chapter I. General provisions

Article 1. Subject and purpose of the law

(1) This law regulates conditions of creation, implementation of activities, monitoring and supervision of Single Central Securities Depository, and also requirements concerning registration and accounting of securities by Single Central Securities Depository and its participants.

(2) the Purpose of this law is creation of modern infrastructure of the financial market, ensuring protection of the rights of owners of securities, management of systemic risks and maintenance of stability in the financial market of the Republic of Moldova.

Article 2. Basic concepts

(1) for the purposes of this law the following concepts are used:

activities of material value - activities which partial or complete interruption can affect significantly capability of Single central depositary constantly to conform to the requirements established by the legislation;

supervisory authority - National Bank of Moldova or the National commission on the financial market, according to the sphere of the competences established by this law;

the security account - the account on which crediting and debiting of securities can be performed;

the CFI code - the code describing characteristics of the financial instrument at the time of its issue (Classification of Financial Instruments) and remaining invariable for all lifecycle of the corresponding financial instrument. Assignment of the CFI codes is performed in ISO 10962 by Single central depositary according to its internal regulations;

the ISIN code - international security identification number (International Securities Identification Number) appropriated according to the international standard ISO 6166, which unambiguously identifies certain issue of securities;

communication between the central depositaries - the agreement between the central depositaries by means of which one central depositary becomes the participant of settlement system on financial instruments of other central depositary for simplification of transfer of financial instruments from members of the last central depositary to members of the first central depositary, or the agreement by means of which one central depositary gets access to other central depositary indirectly, through the intermediary. Communications between the central depositaries include standard communications, individual communications, indirect connections and interoperable communications;

standard communication - communication between the central depositaries by means of which one central depositary becomes the participant of settlement system on financial instruments of other central depositary based on the same concepts and conditions applicable to any other participant of the settlement system on financial instruments managed by the last;

individual communication - communication between the central depositaries by means of which one central depositary which became the participant of settlement system on financial instruments of other central depositary receives certain services, additional to the services which are usually provided by the relevant central depositary to participants of settlement system on financial instruments;

indirect connection - the agreement between the central depositary and the third party which is not depositary, but at the same time is participant of settlement system on financial instruments of other central depositary. Such connection is established by the central depositary for simplification of transfer of financial instruments to the participants from members of other central depositary;

interoperable communication - communication between the central depositaries by means of which depositaries agree about acceptance of mutual technical solutions for calculations within settlement systems for financial instruments which they manage;

calculation - completion of the transaction with financial instruments irrespective of the place of its making for the purpose of repayment of obligations of the parties according to this transaction by money transfer or financial instruments or that and another;

dematerialization - process in case of which securities are issued in the form of records on accounts;

Single Central Securities Depository (further - Single central depositary) - the central depositary of financial instruments performing activities according to this law;

the central depositary of financial instruments (further also central depositary) - subject which manages system of calculation for financial instruments ("settlement service") and provides at least one of the following services:

a) primary registration of financial instruments in the form of record on the account ("service of registration of financial instruments");

b) opening and administration of accounts of top-level financial instruments ("service of centralized administration");

the security holder - the physical person or legal entity owning securities based on the property right which is client of the participant or Single central depositary and on behalf of which the participant or Single central depositary records securities in the form of record on the account;

paid delivery or "DvP" - the mechanism of calculation for financial instruments which connects transfer of financial instruments with money transfer in such a way that delivery of financial instruments happens if only in case the corresponding money transfer and vice versa also takes place;

the participant - the investment societies or other organizations established by regulations of National Bank of Moldova in coordination with the National commission on the financial market, authorized to open and own security accounts in Single central depositary on its own behalf and/or on behalf of owners of securities.

(2) In that measure in what they are not provided by part (1), the concepts and expressions used in this law matter, provided by the Law on finality of calculations in payment systems and settlement systems for financial instruments No. 183/2016 and the Law on the capital market No. 171/2012.

Article 3. Legal position of Single Central depositary. Calculations. Accounts

(1) the Single Central depositary is created in the form of joint-stock company according to the Join-stock companies law No. 1134/1997, with the features established by this law.

(2) the Transactions calculated in Single Central depositary in national currency are carried out through the accounts opened in National Bank of Moldova.

Article 4. Capital of Single Central depositary. Shareholders

(1) the Single Central depositary at any time shall have the sufficient level of equity for provision of the services as appropriate, proceeding from going concern principle and in view of risks of storage, operational, legal, investment and commercial risks which are inherent in it or to which it can be subject.

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