THE DECISION OF STATE COMMISSION ON SECURITIES AND THE STOCK MARKET OF UKRAINE

of October 17, 2006 No. 999

About approval of the Regulations on depository activity

According to articles 3 and 8 of the Law of Ukraine "About state regulation of the security market in Ukraine", Articles 6, "About National depositary system and features of electronic security circulation in Ukraine" and for the purpose of enhancement of the basic concepts, rules and requirements to implementation of depository activity in National depositary system of Ukraine State commission on securities and the stock market SOLVED 14 and 17 Laws of Ukraine:

1. Approve Regulations on depository activity it (is applied).

2. Declare invalid the Regulations on depository activity approved by the decision of State commission on securities and the stock market of 26.05.1998 No. 61.

3. To securities depositories and keepers of securities to bring the activities into accord with requirements of this Provision not later than year from the effective date of this solution except for of regulation of Item 2 of the Section II of this Provision to which requirements of Item 6 of the Section VII "Final provisions" of the Law of Ukraine "About securities and the stock market" are applied.

4. To provide to the chief of staff of State commission on securities and the stock market M. Nepran:

state registration of this decision in the Ministry of Justice of Ukraine;

the publication of this decision according to the legislation.

5. Control over the implementation of this decision to assign to the member of the commission V. Petrenko.

 

 

Approved by the Decision of State commission on securities and the stock market of Ukraine of October 17, 2006 No. 999

Regulations on depository activity

This Provision is drafted according to articles 3 and 8 of the Law of Ukraine "About state regulation of the security market in Ukraine", Articles 6, 14 and 17 Laws of Ukraine "About National depositary system and features of electronic security circulation in Ukraine", articles 27 and 47 of the Law of Ukraine "About securities and the stock market", the Law of Ukraine "About the prevention and counteraction of legalization (washing) of income gained in the criminal way or to terrorism financing" and other regulatory legal acts of Ukraine.

This Provision determines the list of securities which are serviced in National depositary system, the main functions of depository institutions and the rule of implementation of transactions in case of accomplishment by them of storage and servicing of security circulation on accounts in securities and transactions of the issuer of the securities which are rather issued by it, feature of depositary servicing of institutes of general investment and the pension funds, order of interaction of keepers and securities depositories with other participants of National depositary system, the requirement to creation of the accounting and summary accounting register of owners of securities, requirements to implementation and combination of depository activity.

Section I. General provisions

1. In this Provision terms are used in the following value:

active analytical accounts of depositary accounting - the account of depositary accounting which are opened by depository institution according to its internal documents and according to requirements of the standards of depositary accounting approved by National depositary of Ukraine, approved by State commission on securities and the stock market or the National commission on securities and the stock market (further - the Commission), for the purpose of ensuring depositary accounting of depositary assets, in particular, for display of the place of their finding (storage) and conditions of issue of securities;

unconditional transaction on management of the account in valuable bumagakhspisaniye, transfer or transfer of securities on the account in securities of the depositor and/or client without its order during transactions by the issuer with securities, and also in connection with capacity to act change (legal incapacity or recognition of person incapacitated), owing to transfer of securities in inheritance and in other cases, stipulated by the legislation;

unconditional transaction concerning restriction of implementation of transactions in system of depositary accounting of depository institution with securities of separate release of the certain issuer (further - unconditional transaction concerning restriction of implementation of transactions) - establishment of restriction for implementation of accounting transactions with all securities of separate release which are available in system of depositary accounting of depositary and its clients which is performed for certain term or before certain event according to internal documents of depository institutions with ensuring safety of condition of accounts in securities of depositors, clients based on the judgment, the decision of the Commission, the order/resolution of the authorized person of the Commission, the order/resolution of the authorized person of State commission on securities and the stock market and other bases, the established law;

date of accounting - date which is appointed by the authorized body of management of the issuer or person (persons) appointing extraordinary general meeting of the issuer or public authority if the laws of Ukraine confer appropriate authority as of which the depository institution needs to constitute the accounting or summary accounting register of owners of securities. In case of creation of the register in paper form it shall be with the stitched and numbered pages, certified by signatures of officials and under seal depository institution;

depositary assets - certificates of bearer securities, certificates on immobilization of personalized securities, global certificates of securities and temporary global certificates of securities, entries on accounts in securities of depositaries in other depositaries, including in National depositary of Ukraine, and also entry on accounts in securities of keepers in depositaries and in National depositary of Ukraine and entry on accounts in securities of National depositary of Ukraine in foreign depository institutions;

depository institution - the keeper of securities (daleekhranitel), National depositary of Ukraine or securities depository (further - depositary);

depository operation - set of actions of depository institution concerning implementation of depository activity by it according to the legislation;

depositary accounting - accounting of securities on accounts in securities of owners of securities at keepers or accounting on accounts in securities which performs depositary for keepers, issuers and other depositaries and which provides analytical and synthetic accounting of securities on accounts in securities on which acquisition and transfer of property on securities, restriction concerning transfer of property for securities, movement of depositary assets is displayed.

deposition of securities - transfer by the owner of the securities belonging to it to the keeper or transfer of securities by the keeper to depositary, or transfer of securities by depositary to other depositary, or transfer of the global certificate by the issuer to depositary for implementation of depository activity;

the summary accounting register of owners of securities (further - the summary accounting register) - the list of owners of securities of certain release constituted by depositary for date of accounting with indication of information on owners of securities, about the number of the securities belonging to each owner and the facts of burdening of these securities obligations;

the initiator of depository operation - person, according to the order or other requirement of which in system of depositary accounting of depository institution depository operations are carried out. The depositor, the client managing the account in securities, depository institution, registry holder, public authorities in limits of their powers can be the initiator of depository operation;

investment (mutual) funds - investment funds and mutual funds of investment companies which perform general investment and are created before entry into force of the Law of Ukraine "About institutes of joint investment (share and corporate investment funds);

managing the account in securities (further - managing the account) - the status acquired at the keeper by person to whom the depositor confers powers concerning management of its account in securities or in depositary - the legal entity to whom the issuer confers powers on management of its account in securities, or the subject of management of objects of state-owned property which according to the legislation performs functions on management of the securities which are objects of state-owned property, amount of powers managing the account is established by the corresponding transaction or according to acts of the civil legislation;

the client of depositary - the keeper who uses services of depositary based on the depositary agreement, or the issuer who uses services of depositary based on the service agreement of issue of securities, or other depositary, including National depositary of Ukraine which uses services of depositary based on the agreement on correspondence relations concerning securities (further - depositary correspondent);

the interdepositary message - the message of one depository institution sent another concerning securities;

international security identification number (code of securities) - number (code) which allows to identify unambiguously security or other financial instrument which assignment is provided by the laws of Ukraine;

the accounting register of owners of securities (the accounting register) the list of owners of securities of certain release constituted by the keeper for date of accounting whom it services, with indication of information on owners of securities, about the number of the securities belonging to each owner and the facts of burdening of these securities obligations;

operational day of depository institution - the term of its work determined by internal documents of depository institution during which it performs transactions on depository activity;

transaction with securities - action of the stock market participant which leads to acquisition or the termination of the property rights to securities or restriction of turnover of securities and/or realization of the rights on securities;

burdening of securities obligations - any restrictions concerning ownership, uses or the orders securities connected with conditions of inheritance, pledge, the judgments and in other cases, stipulated by the legislation Ukraine;

transactions of the issuer bumagrazmeshcheniye, the redemption, crushing, consolidation, converting, repayment, cancellation, the payment of the income for securities, transaction connected with reorganization and/or change of the size of the authorized capital of transaction concerning the change of the storage location of the global certificate, transaction on transfer of issue of securities of documentary form of existence in undocumented form of existence and other transactions according to the legislation which is rather issued by him valuable;

passive analytical accounts of depositary accounting - the account of depositary accounting which depository institutions open for depositors and clients according to their internal documents and according to requirements of the standards of depositary accounting approved by National depositary of Ukraine, approved by the Commission for the purpose of ensuring depositary accounting of securities on accounts in securities of depositors and clients and displays of the transactions connected with transfer of property on securities and restriction concerning transfer of property for securities;

registry holders are registrars and issuers who keep registers of owners of personalized securities according to the legislation;

placement of securities - alienation of securities by the issuer or underwriter by the conclusion of the civil contract with the first owner;

the order (order) (further - the order) - the document which contains the requirement to depository institution to execute one or several interconnected depository operations;

the manager of the account in securities - the status which in depository institution acquires the physical person having powers to sign orders or otherwise, the provided this Provision, internal documents of depository institution or the contract between depository institution and the depositor or the client, the drawn-up requirements concerning accomplishment of transactions in system of depositary accounting of depository institution;

the certificate on immobilization of personalized securities - the document of depositary accounting which is issued by registry holder to depository institution and is confirmation of entering into system of the register of information on the securities immobilized in depository institution as the nominee holder for their further accounting and the address in the form of accounting records on accounts in securities of their owners in systems of depositary accounting of keepers and in case of immobilization of securities in depositary - on accounts in securities of keepers in depositary.

2. Keepers legal entities - banks, dealers in securities or registrars which have the license for implementation of professional activity in the stock market - depository activity, namely depository activity of the keeper of securities are recognized.

3. Depositary the legal entity created in the form of open joint stock company, having the license for implementation of professional activity in the stock market - depository activity is recognized, namely: depository activity of securities depository. Depositaries shall have the special account in securities in each other depositary and open such accounts for all other depositaries based on the contractual bilateral full-function correspondence relations established among themselves concerning securities.

4. In case of receipt of the license for implementation of professional activity in the stock market - depository activity, namely: the activities for maintaining the register of owners of personalized securities issued by the Commission, the depository institution has the right to perform functions of the registrar.

5. Depository institutions perform depository activity according to requirements of this Provision, other regulatory legal acts, and also the corresponding standards approved by National depositary of Ukraine, approved by the Commission which are applied taking into account the features established by the relevant laws of Ukraine.

6. The principles of creation of system of depositary accounting of securities are established by the regulations and rules of accounting of securities in National depositary system approved by the Commission and approved by the National Bank of Ukraine.

Section II. The list of securities concerning which depository activity is performed and which are allowed to servicing in National depositary system

1. Depository institutions perform depository activity only concerning such securities which exist in paperless form by result of their placement in such form or transfer in such form according to the legislation:

shares;

bonds of the companies;

bonds of local loans;

government bonds of Ukraine;

treasury obligations of Ukraine;

investment certificates;

hypothecation certificates;

mortgage bonds;

certificates of funds of real estate transactions;

option certificates;

other securities according to the separate decision of the Commission.

2. Depository institutions perform depository activity only concerning those securities to which the code of securities according to the international standard ISO 6166 Securities - the International numbering system for identification of securities is appointed.

3. Features of implementation of depository activity concerning government securities are established by State Commission and the National Bank of Ukraine.

4. Working interest owners of National depositary system are forbidden to perform depository activity concerning bills of exchange and mortgage.

5. Servicing of placement and turnover of securities of foreign issuers in the territory of Ukraine is performed by depository institutions on condition of their admission and/or registration according to the procedure, stipulated by the legislation Ukraine.

6. Features of servicing of transactions of nonresidents in National depositary system are established by the legislation.

7. The accounting treatment for securities in foreign depository institution and confirmations of the property rights to securities of the Ukrainian issuers concerning which permission to placement is issued and / илиобращение them outside Ukraine (according to the decision made by the Commission) which are considered on the account in securities of foreign depository institution in National depositary of Ukraine, is established by the legislation of the country of foreign depository institution.

8. Depository institutions are forbidden to perform depository activity concerning the securities placed in paperless form or transferred to such form in case of dematerialization or converting, without registration on all their release of the global certificate with its obligatory deposition in depositary if another is not stipulated by the legislation other countries concerning accounting of the securities placed outside Ukraine.

Section III. Main functions of depository institutions

1. Depository institutions for implementation of depository activity perform such functions:

storage of securities;

servicing of security circulation on accounts in securities;

servicing of transactions of the issuer of the securities which are rather issued by it.

Clearing and calculations for transactions concerning securities are perfromed only by depositary which obtained the license for implementation of professional activity on share rynkeraschetno-clearing activities.

2. For ensuring storage of securities depository institutions perform such depository operations:

adoption of certificates of securities and certificates on immobilization of personalized securities;

storage of certificates of bearer securities;

storage of certificates on immobilization of personalized securities;

transportation of certificates of securities and certificates on immobilization of personalized securities;

issue of certificates of securities which were stored by depository institution;

verification of certificates of securities on reality (authenticity) and on availability of all details established by the legislation of Ukraine;

inventory count of certificates of securities and certificates on immobilization of personalized securities;

other transactions which can be referred by the legislation to function of storage of securities.

Depositaries, except above-mentioned transactions, carry out such depository operations:

adoption of global and temporary global certificates;

storage of global and temporary global certificates;

inventory count of global and temporary global certificates.

3. For accomplishment of service function of security circulation on accounts in securities depository institutions perform such depository operations:

administrative transactions;

accounting transactions;

information transactions.

3.1. Administrative transactions - depository operations on opening of accounts in securities, to modification of the questionnaire of the account, closing of accounts in securities, to change of method of storage of the securities and other changes which are not connected with change of remaining balance of securities on accounts in securities.

3.2. Accounting transactions - depository operations on account management in securities and to display of transactions with securities which consequence change of quantity of securities on accounts in securities, establishment or lifting of restrictions concerning their address, and also change of the storage location (stay) of depositary assets is. Transactions of transfer, write-off, transfer, movement of securities belong to accounting transactions of depository institutions.

3.3. Information transactions - depository operations which consequence issue of statements and references from the account in securities and other information concerning transactions of depositors or clients with accounts in securities according to requirements of this Provision and conditions of the agreements signed by depositors, clients with depository institutions is.

Transactions on preparation and issue belong to information transactions of depository institutions:

statements or references from the account in securities;

information references;

information concerning transactions of the issuer (including provision of information on holding general meeting by the issuer, use of voting power and so forth);

information on holding extraordinary general meeting of joint-stock company upon the demand of shareholders (shareholder) who on the date of submission of the requirement about holding extraordinary general meeting in total are owners of 10 and more percent of common shares of joint-stock company (posylaniye to shareholders of the notice on holding general meeting);

provision to the shareholder of information on its inclusion in the list of shareholders who have the right to participate in general meeting;

help and analytical materials which characterize the security market.

The keeper who concluded with the issuer in the course of dematerialization of the shares issued by him the agreement on opening of accounts in securities to owners according to the Regulations on procedure for transfer of release of nominal shares of documentary form of existence in undocumented form of existence approved by the decision of State commission on securities and the stock market of June 30, 2000 No. 98, registered in the Ministry of Justice of Ukraine on October 12, 2000 for No. 706/4927, can perform for such issuer preparation and provision of help and analytical materials which characterize the security market, and also consultation on questions of security circulation and accounting of the property rights to them.

Depositaries, except above-mentioned transactions, can perform transfer to keepers of information on introduction, exception and stay of securities in the stock exchange list obtained by depositary from stock exchange (securities which underwent the procedure of listing at the exchange) in case of receipt of such information from the exchange.

Issue of the account statement in securities which is confirmation of the property rights to securities which are considered on the account in securities is only transaction of keepers.

3.4. The depository institution shall record belonging to the depositor or the client of securities separately from accounting of securities which belong to other depositors, clients.

3.5. The depository institution shall record belonging to the depositor or the client of securities separately from accounting of securities which are in property of this depository institution.

3.6. Inclusion of securities which are considered on accounts in securities of depositors or clients, in structure of property of depository institution is forbidden.

3.7. On securities of depositors or clients of depository institution, except securities which belong to this depository institution restrictions in the address on obligations of this depository institution cannot be applied.

3.8. When carrying out depositary accounting the depository institution constantly shall provide respect for depositary accounting balance between amount of the depositary assets placed in depository institutions and distribution of securities which make these depositary assets, between depositors or clients of depository institution.

4. For servicing of transactions of the issuer on the securities issued by it depository institutions carry out depository operations which results are displays on accounts in securities of such transactions of the issuer of the securities which are rather issued by it:

the redemption - acquisition by the issuer of the securities issued by it by the conclusion of civil contracts with owners of these securities for their subsequent sale or cancellation according to the legislation;

crushing - reduction of nominal value of securities of certain release with simultaneous increase in their quantity without release scope change;

consolidation - increase in nominal value of securities of certain release with simultaneous reduction of their quantity without release scope change;

converting - exchange of the issuer of securities of one release for securities of other release according to conditions of their release;

cancellation - set of actions of the issuer concerning cancellation of all rights which are granted by securities;

repayment - set of actions of the issuer concerning the termination of security circulation and their cancellation in accordance with the terms of release;

change of the storage location of the global certificate - set of actions of the issuer concerning transfer of issue of securities on storage and servicing in system of depositary accounting of other depositary;

dematerialization - set of the actions concerning transfer of issue of securities placed in documentary form of existence in undocumented form of existence;

the transactions connected with change of the size of the authorized capital of joint-stock company;

payment by the issuer of the income for the securities issued by him;

the transactions connected with reorganization;

other transactions which can be referred according to the legislation to service function of transactions of the issuer of the securities which are rather issued by it.

4.1. Servicing of transactions of the issuer of the securities which are rather issued by it performs depositary according to requirements of the legislation according to the order of the issuer of the securities and the relevant documents or their copies certified in the procedure established by the legislation which confirm availability of the bases for implementation of transactions with securities on accounts in securities.

4.2. Opening and maintaining for issuers of accounts in securities on bank entry securities which take place, cancelled or redeemed by the issuer performs only depositary.

5. When implementing depository activity depository institutions provide also such services:

on creation of the accounting or summary accounting register of owners of securities;

on immobilization of securities and registration of depository institution as nominee holder in the register of owners of personalized securities;

on transfer of all issue of securities, placed in documentary form, in paperless form;

on transfer of all issue of securities, placed in paperless form, in documentary form;

on carrying out materialization of the immobilized securities which release is registered in documentary form of existence;

on servicing of investment funds, mutual funds of investment companies, institutes of joint investment (share and corporate investment funds) and pension funds;

on implementation, servicing and maintenance of the computerized systems of servicing of accounts in securities;

the certificate keepers of powers of attorney from physical persons - depositors of these keepers on the right of participation and vote on general meeting of joint-stock company which shares are considered at keepers on accounts in securities of depositors;

information and organizational support of holding general meeting of joint-stock company according to the prisoner with it or with shareholders (shareholder) who, (which) in total are owners (owner) of 10 and more percent of common shares of joint-stock company, the agreement;

accomplishment by depository institutions of functions of the registration commission, counting board.

6. In the limits determined by the legislation of functions, depository institutions can perform other depository operations if they are carried by the legislation to depository activity.

Section IV. Requirements to storage of securities

1. Depository institutions store securities by two methods: isolated or collective.

1.1. In case of the isolated storage method the depository institution shall record securities with indication of individual signs of their certificates. Their series and numbers belong to individual signs of certificates of securities.

1.2. By the isolated method only securities can be stored in documentary form of existence to bearer.

1.3. The immobilized personalized securities registered in documentary form of existence and the securities placed in undocumented form or transferred to such form in case of dematerialization or converting are stored by depository institutions by exclusively collective method.

1.4. The total quantity of the securities of certain release placed in undocumented form or transferred to such form in case of dematerialization or converting which are considered in the depositary servicing this release according to the service agreement of issue of securities signed with the issuer on accounts in securities of his clients shall equal to the quantity specified in the global certificate of this release which is kept in depositary.

The total quantity of the securities of certain release placed outside Ukraine which are considered in National depositary of Ukraine on accounts in securities of his clients shall equal to the number of securities of this release which are considered on correspondent account of National depositary of Ukraine in foreign depository institution.

1.5. The total quantity of the personalized securities of certain release immobilized in depository institution which are considered on accounts in securities of depositors or clients of depository institution shall equal to the quantity specified in the certificates on immobilization of personalized securities of this release granted by registry holder who keeps the register of owners of personalized securities of this release, addressed to this depository institution as the nominee holder for storage.

1.6. The total quantity of the bearer securities of certain release immobilized in depository institution which are considered on accounts in securities of depositors or clients of depository institution shall equal to the total quantity specified in their certificates which are accepted by this depository institution on storage.

1.7. The total quantity of securities of certain release which are considered on the account in securities of depositary correspondent in depositary shall equal to the number of securities of this release which are considered in such depositary correspondent on accounts in securities of his clients - keepers.

The total quantity of securities of certain release which are considered on the account in securities of the keeper in depositary shall equal to the number of securities of this release which are considered at such keeper on accounts in securities of its depositors.

2. Storage of securities which is not followed by their accounting on accounts in securities does not belong to depository activity and is performed according to requirements of the legislation of Ukraine.

3. Acceptance of certificates by depository institution of the securities issued in documentary form is followed by creation of the delivery-acceptance certificate by it.

4. The depository institution provides verification of certificates of securities on compliance to requirements of the legislation of Ukraine, and certificates of bearer securities on reality (authenticity):

in case of acceptance of certificates of securities in case of immobilization of securities;

after transportation of certificates of securities;

in case of inventory count;

in other cases, stipulated by the legislation and internal documents of depository institution.

4.1. The depository institution performs verification of certificates of bearer securities on reality (authenticity) and bears responsibility for it according to the internal procedure for conducting verification of certificates of securities on reality (authenticity) approved by governing body of depository institution.

4.2. In case of identification of signs of counterfeit of certificates of securities the depository institution shall report about it to the relevant law enforcement agencies.

5. The total quantity of securities on each issue of securities which is considered at registry holder on the personal account of depository institution as the nominee holder shall equal to the total number of securities on accounts in securities of the depositors or clients which transferred to their nominee holder which shall equal to the number of securities specified in the certificate on immobilization of personalized securities.

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