08.24.2010, LAW, Securities Law (ENG) ('Unoffcial translation' draft of 10.22.2011)

DRAFT 24 August 2010
LAW OF MONGOLIA
ON SECURITIES MARKET
(Revised version)
CHAPTER ONE
GENERAL PROVISIONS
Sub-chapter one
General provisions
Article 1. Purpose of Law
1.1. The purpose of this Law is to regulate the creation of a fair, transparent,
efficient and regulated securities market which protects the investor’s interests,
mitigates market risk through regulation and review of the securities market.
Article 2. Legislation on Securities Market
2.1. The legislation on the securities market consists of the Constitution of
Mongolia, Civil Code, Company Law, Banking Law, Law on Securities Secured by
Property, Law on Licensing of Business Activities, Law on Auditing, Law on State
Supervision and Control, Law on Accounting and the present law and other legislative
acts adopted in conformity with thereof.
2.2. If an international treaty to which Mongolia is a party provides otherwise,
the provisions of the international treaty shall prevail.
Article 3. Scope of this Law
3.1 This law regulates relations related to the activities specified in Article 23 of
this Law on the basis of a special license granted by the Financial Regulatory
Commission (“Commission”).
3.2. Unless otherwise provided in this Law, specific regulation related to the
issuance and trading of securities secured by property shall be found in the law on
Securities Secured by Property. 3.3. Detailed relations regarding the conduct of
investment fund activities shall be regulated by this Law and a special law adopted in
conformity with thereof.
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3.4. Relations regarding the conduct of activities in the securities market secured
by private and state pension fund assets shall be regulated a by special law which
regulates such relations.
3.5. Relations regarding the issuance and trading of derivative securities on the
securities market shall be regulated by this Law and a special law adopted in conformity
with thereof.
3.6. The activities of a legal person that is conducting banking, non-banking
[financial] and insurance activities shall be regulate by this Law and other relations shall
be regulated by legislation specifically designed for each activities.
4.1. Definitions of legal terms
4.1. In this Law, the below mentioned terms shall have the following meaning:
4.1.1. “securities market” means regulated market with permanent
operation, which centrally conducts the selling and purchasing of securities;
4.1.2. “securities” means financial instrument defined in Article 5 of this
Law;
4.1.3. “debt instrument” means a security which certifies the obligation to
repay the principal and interest in the form of cash, or certain property, or
property rights after a certain period of time;
4.1.4. “derivative” or “derivative instrument” means a derivative or a
derivative financial instruments such as options, futures, swaps and forward that
are issued based on certain securities, securities convertibility index, or certain
commodities;
4.1.5. “option” means a security which certifies the right to demand the sell
or redemption of a certain number of shares of a certain company within a
specifically determined period of time;
4.1.6. “futures” means a contract with conditions to supply a certain
amount of product at an agreed price within a determined period of time, or to
transfer certain products at an agreed price regardless of the difference
[between] the price at the conclusion of the agreement and the future price;
4.1.7. “depository receipt” means a security which certifies the right of the
person who holds a depository receipt to enjoy the right under the principal
securities of such depository receipt;
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4.1.8. “principal securities” means shares registered with a stock
exchange of a country other than the one which issued depository receipt;
4.1.9. “securities prospectus” means an prospectus and supporting
documents related to it for the purpose of selling securities through public
offering or specific persons, prepared in accordance with the procedures
specified in the legislation on securities;
4.1.10. “securities participant” means a person conducting regulated
activities, professionals, securities issuer, investors, customers and securities
holder;
4.1.11. “regulated activity” means activities specified in Article 27 of this
Law;
4.1.12. “regulated person” means a person who is granted a special
license or right to conduct regulated activities by the Commission in accordance
with the Sub-chapter 5 of this Law;
4.1.13. “securities broker” means a legal person that is granted a special
license to conduct activities specified in Article 35 of this Law;
4.1.14. “dealer” means a legal person that acquired special license to
conduct activities specified in Article 36 of this Law;
4.1.15. “securities advisor” means a legal person that acquired special
4.1.16. “securities manager” means a legal person that is granted a
special license to conduct activities specified in Article 38 of this Law;
4.1.17. “underwriter” means a legal person that is granted a special
4.1.18. “securities registrar” means a legal person that is granted a special
4.1.19. “securities trade clearing organization” means a legal person that
is granted a special license to conduct activities specified in Article 41 of this
Law;
4.1.20. “securities trade payment clearing organization” means a legal
person that is granted a special license to conduct activities specified in Article
42 of this Law;
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4.1.21. “securities depository organization” means a legal person that is
granted special license to conduct activities specified in Article 43 of this Law;
4.1.22. “custodian” means a legal person that is granted a special license
to conduct activities specified in Article 44 of this Law;
4.1.23. “stock exchange” means a legal person that is granted a special
4.1.24. “eligible person” means a person determined in accordance with
the Article 70 of this Law;
4.1.25. “customer’ means a person being served, on the basis of the
contract, by a regulated person with particular rights which specified in this Law;
4.1.26. “professional investor” means a legal person with a right to
conduct activities of a dealer, underwriter and investment fund at the securities
market, or legal person determined by the Commission as professional investor;
4.1.27. “securities issuer” means a legal person who have registered with
the Commission to sell its securities in the securities market;
4.1.28. “registration of publicly offered securities” means the registration of
securities by the Commission to publicly offer in accordance with the procedures
specified in this Law;
4.1.29. “registration of securities ownership” means the registration of
securities carried out by the authorized securities registrar under the procedures
specified in Article 40 of this Law;
4.1.30. “registration with the stock exchange” means registration of the
securities permitted to be traded on a stock exchange;
4.1.31. “margin” or “pledge assets required for the purchase of securities
through a loan” means money and securities deposited in a special account as a
pledge in the event the customer purchases securities through a broker’s loan;
4.1.32. “position” or “guaranteed right and obligation” means an obligation
to sell or purchase a certain amount of securities, an amount of a certain type of
securities owned by the particular person;
4.1.33. “influential shareholder” means a shareholder who holds 5 percent
or more of a company’s total issued shares with voting rights, alone or with
relevant person, or a shareholder who is exercising the voting right on the basis
of agreement;
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4.1.34. “affiliated person” means:
4.1.34.1. as for the individual person, his wife, husband, son,
daughter, adopted or step son, daughter, brother-in-law, sister-in-law,
father of a daughter-in-law, parents, step parents, brother, sister, young
brother and sister, brother and sisters with same father or mother;
4.1.34.2. company in which the person works as director;
4.1.34.3. company of which any of the person specified in
paragraph “4.1.34.1” of this section holds 20 or more percent of the voting
rights;
4.1.34.4. as for the employer, an employee;
4.1.34.5. as for the company, its controlled, subsidiary and twin
company.
4.1.35. “union of regulated persons” means legal entities having the
following relationship to the regulated persons:
4.1.35.1. Parent company, partnership and other legal entity of
regulated persons;
4.1.35. 2. Controlled and subsidiary company, partnership, and
other legal entity of regulated persons;
4.1.35. 3. Controlled and subsidiary company, partnership and
other legal entity of regulated persons parent
company;
4.1.35.4. Predominant company and other legal entity of
regulated persons controlled and subsidiary company;
4.1.35.5. Person who is holding the control package of the legal
entities of regulated persons specified in 4.1.35.1-
4.1.35.5;
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CHAPTER TWO
ISSUANCE AND TRADING OF SECURITIES
Sub-chapter two
Issuing of Securities
Article 5. Securities
5.1. The following financial instruments shall be considered as securities
regulated by this Law:
5.1.1. common and preferred shares constituting the shareholder’s equity
of the joint stock company registered with stock exchange (“shares”);
5.1.2. bond issued by a company;
5.1.3. bond issued by the Government and Governors of the aimag and
capital city;
5.1.4. bond with maturity of more than one year and issued by Central
Bank;
5.1.5. the right to order a certain number of shares and debt instruments
or warrants, within certain period of time and at an agreed price, offered by the
securities issuing company to investors;
5.1.6. the right or option to sell and purchase securities;
5.1.7. futures agreement related to the indexing of securities and shares;
5.1.8. a unit right in a mutual fund and shares of the investment company;
5.1.9. depository receipt;
5.1.10. other financial instruments considered by the Commission as
securities in accordance with this Law.
5.2. The following instruments shall not be considered as securities regulated by
this Law:
5.2.1. securities of a limited liability company;
5.2.2. futures agreement not related to the indexing of the shares and
securities;
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5.2.3. bills of exchange and basic promissory notes;
5.2.4. depository certificates issued by a bank;
5.2.5. other securities with a maturity less than one year issued by a
commercial banks to be trade in a monetary market under Article 15.2 of the
Banking Law.
Article 6. securities issuer
6.1. A legal entity conducting activities for profit may issue securities under
Company law and this Law.
6.2. Shares may be issued in the securities market only by a joint stock
company registered with the stock exchange.
6.3. The Government and Bank of Mongolia may issue securities offered to the
public with the permission of the State Great Khural and the Governors of aimag and
capital city may issue securities offered to the public with the permission of the Citizens’
Representatives Khural.
Article 7. Order of the Securities issuance procedure
7.1. Unless otherwise provided in legislation, securities shall be issued on the
primary securities market according to the following order:
7.1.1. the authorized body of a securities issuer shall make a decision to
issue securities;
7.1.2. [the securities issuer] make the preparation work to issue securities
and to develop the securities prospectus and the supporting documents;
7.1.3. the authorized body of the securities issuer shall approve the
documents and the draft prospectus specified in section 7.1.2 of this Law
7.1.4. the Security issuer shall register its securities at registration of
publicly offered securities of the Commission and obtain permission to offer its
securities to public;
7.1.5. [Security issuer] shall be registered at registration of securities
ownership;
7.1.6. [Security issuer] register its securities and offer its securities to
public;
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7.1.7. sell securities on the securities primary market pursuant to
permission granted by the Commission;
7.1.8. submit a report and documents on the issuance of securities to the
Commission and stock exchange according to the relevant procedures and
inform the public.
7.2. The regulation on the making of decision to issue bond from Government,
aimag and capital city shall be approved by the Government, the regulation on the
making of a decision to issue securities from the Bank of Mongolia shall be approved by
the Bank of Mongolia respectively.
Article 8. Registration of the Securities
8.1. Unless otherwise mentioned in law, registration of publicly offered
securities and approval of the securities introduction shall be done solely by the
Commission.
8.2. The general regulation of the registration of publicly offered securities and
approval of the securities introduction shall be established by the Commission.
8.3. Special procedures to register bonds, securities secured by property, and
derivative securities of the Government, the Bank of Mongolia, aimag and capital city
permitted for public offering shall be established by the Commission.
8.4. The Commission shall make a decision on registration [of publicly offered
securities] within 30 business days after receiving a request for registration of [publicly
offered] securities other than those specified in Article 8.3 of this Law. In the event
additional materials are required, the Commission may extend the registration decision
making period up to 30 days.
8.5. Unless otherwise mentioned in legislation additional securities shall be
registered in accordance with the procedures provided for in this Article.
8.6. Unless otherwise mentioned in law, additional securities, to be sold through
a closed sale, of the legal entity that previously issued publicly offered securities shall
be registered in accordance with the general procedures specified in this Law.
8.7. The securities issuer shall be responsible for the accuracy of the
information specified in the application to register securities and damages incurred to
others caused from the foregoing inaccurate information.
8.8. The Commission shall not be liable for any loss incurred due to the
purchase of securities [by a person] and the registration of publicly offered securities by
the Commission shall not be considered as any guarantee by the Commission.
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8.9. In the event the an application to register securities [with the Commission]
was not submitted in accordance with appropriate procedures, or does not satisfy
prescribed requirements, or the required information was not included in the application,
or the application included incomplete information, or information included in the
application was contradictory, or the application included false information and
additional information requested by the Commission have not been submitted in a
timely manner, or the registration of the securities might negatively affect the public
interest, the Commission shall refuse to register such securities.
8.10. If the securities issuer deems it necessary, the securities issuer may
submit a request to obtain registration of publicly offered securities to the Commission,
together with the [application] request to register with the stock exchange. Registration
of the securities at stock exchange before a decision [to register security and grant
permission to offer securities to public] has been made by the Commission shall not be
ground to offering of securities to public.
Article 9. Securities prospectus
9.1. The securities prospectus shall be valid for a period of six month after its
approval by the Commission. During this period the securities shall be offered to public
on the basis of the securities prospectus of such securities and it is prohibited to publicly
offer securities after the expiry of the validity period [of the securities prospectus.
9.2. If the securities prospectus has not been re-approved after the expiry of the
period specified in Article 9.1 of this Law, after six months from the expiry of [the period
specified in Article 9.1] such period, the registration of such securities shall be revoked
by the Commission.
9.3. Detailed regulation on the securities issuer, requirements and forms of the
securities introduction and the preparation of the securities introduction shall be
established by the Commission.
9.4. The securities prospectus shall include (1) all the required information such
about securities issuer, (2) its shareholders, (3) management, (4) structure, governing
person, asset, debt and financial capacity of the securities issuer, current and future
potential risks, securities being issued, rights certified by such securities, regulation to
sell securities, and third party opinions and assessments.
9.5. The securities introduction shall mandatorily include the the following
information:
9.5.1. the proper name, permanent address as well as about the activities
being conducted [by the securities issuer], and whether [the securities issuer] is
registration with the stock exchange;
9.5.2. a copy of the securities issuer’s state registration certificate for legal
entity;
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9.5.3. the full name of a shareholder holding more than 5 percent of the
total voting shares issued by the securities issuer, the amount and percentage of
the shares held by the shareholder alone or jointly with any affiliated person;
9.5.4. about the structure, organization and governing person of the
securities issuer, and the amount and percentage of shares [of the securities
issuer] owned for the last 3 years;
9.5.5. the amount of owner’s equity of securities issuer (charter fund), the
amount and nominal value of previously issued securities, the amount of [the
securities issuer’s] own assets and tangible and intangible asset;
9.5.6. the balance sheets, debt and loan assessment for the last 3 years
which has been reviewed and approved by an auditing organization;
9.5.7. about agreements and contracts to which the securities issuer is
obliged with a value that equals five and ……… percent of its registered capital
and about [the securities issuer] implementation of the payment obligation which
equals five and ……… percent of its registered capital;
,
9.5.8. about the persons related to securities issuer or other relevant
person;
9.5.9. the number, form and nominal value of the publicly offered
securities, the conditions and the procedures to offer or sell securities to the
public, and the procedures for distributing dividends (interest as for bond);
9.5.10. a plan to use investments earned from the sale of the publicly
offered securities;
9.5.11. about the procedures to convert such securities into shares if
applicable;
9.5.12. about the activities of the securities issuer and the price risk to
such securities;
9.5.13. about regulated persons cooperating in the activities of publicly
offering such securities or providing professional services, contract concluded
with regulated persons, mutual rights, obligations and liabilities with regulated
persons;
9.5.14. as for debt instruments, about guarantees and pledge property to
repay;
9.5.15. others.
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9.6. The methodologies and procedures to determine the selling price of publicly
offered securities, the securities issuer’s financial statement for the last 3 years as
audited by an auditing organization, and the financial statement for the preceding
quarter and month prior to submission of the registration request to the Commission
shall be inseparable part of the securities introduction.
9.7. In the information reflected in the securities introduction, if the assessment
and opinion of the third party expert or professional is included, the following information
and supporting document should be attached to the securities introduction:
9.7.1. the name, address and experience of the expert issuing such
opinion;
9.7.2. the guarantee issued by the expert that such opinion was issued
under the relevant procedures and without any conflict of interest;
9.7.3. permission [from the expert or professional] not to refuse the public
disclosure of such opinion in the securities introduction.
9.8. Additional information that shall be reflected in the prospectus other than
those mentioned in Articles 9.4-9.5 of this Law shall be determined by the Commission.
9.9. The Chairman of the board of directors and executive director representing
the securities issuer shall sign the request [application], the securities introduction and
the copies of the [supporting] documents.
9.10. The securities issuer is prohibited from making any changes in the
securities introduction as approved by the Commission without the permission of the
Commission.
9.11. An interested party [person] may make a request to the Commission to
determine if the securities introduction offered to public is copy approved by the
Commission.
9.12. In the the following circumstances, the securities introduction shall not be
required:
9.12.1. Government bond, the Bank of Mongolia securities;
9.12.2. securities on which Government guarantee is fully issued;
9.12.3. in the case of consolidation and splitting of shares;
9.12.4. converting a convertible bond into shares;
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9.12.5. issuing securities to all shareholders for free;
9.12.6. other circumstances prescribed by legislation.
9.13. Special procedures regarding the registration of publicly offered securities
specified in Article 9.12 of this Law shall be established by the Commission.
Article 10. Public offering of the securities
10.1. The public offer of securities shall be construed as being activities to
introduce and advertise securities to the following persons by a securities issuer
whether issued alone or with the support of a authorized regulated person for the
purpose of selling them on the primary securities market:
10.1.1. to offer to fifty (50) or more specific purchasers or investor in a
closed manner;
10.1.2. to freely offer public.
10.2. The securities shall be offered to the public only within the scope
registered with the Commission and on the basis of the prospectus approved with the
Commission.
10.3. The securities issuer during the process of offering its securities to public
shall provide any interested person with an opportunity to obtain the securities
introduction free of charge.
10.4. In the event the Commission required additional information from the
securities issuer, or it has been proven that the securities issuer misled, provided
inaccurate or incomplete information during the registration of securities, or publicly
introduced securities, or misled, or gave false promises on the basis of such
information, the Commission may suspend such public offering of securities or may
revoke the registration.
10.5. The securities issuer shall be held liable for the expenses and other
damages arisen in connection with the revocation of the registration of publicly offered
securities as provided in Article 10.4 of this Law due to guilty activities of the securities
issuer.
10.6. An underwriter, or the auditor, the assessor, and the lawyer who issues a
false or incomplete opinion shall be held jointly liable for the damage caused when
worked jointly when a violation was committed as specified in Article 10.4 of this Law.
10.7. Damages specified in Article 10.5 and 10.6 of this Law shall be claimed
through the courts.
10.8. It is prohibited to publicly offer shares not registered and to publicly offer
shares of a limited liability company.
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Article 11. Selling of securities on the primary market, and reporting
11.1. Only securities registered with at the Commission and permitted for public
offering and registration of the stock exchange shall be sold on the securities primary
market.
11.2. In order to trade securities in the securities primary market, the Security
issuer shall be registered at the relevant stock exchange and on the basis of the request
made by the stock exchange, the Commission shall issue permission to sell the
securities at securities primary market.
11.3. It is prohibited to sell securities through a loan at the securities primary
market.
11.4. The securities issuer shall submit a report regarding primary market
securities sales transactions to the Commission within 3 days of conclusion of the sale
of securities. The information to be reflected in the report shall be determined by the
Commission.
11.5. In the primary market securities trade report, the conclusion of the
authorized trading organization1
that organized such transaction shall be attached.
11.6. The Commission shall review the primary market securities trade report
within 10 days and if no violation is found, or considered that the trading of [the
securities] on the primary market was successful, the Commission shall issue
permission to start the trading on the secondary market and to open rights of the
securities issuer to dispose the proceeds of the securities sale.
11.7. The Commission shall consider that the primary market trading was
successful under the following circumstances:
11.7.1. in the case of securities issued at nominal value, all the shares
offered to public was sold or payment for the purchase of securities has been
paid;
11.7.2. in the case of securities sold at a value other than the nominal
value, the investment required for the execution of the work and services
specified in the securities prospectus which was introduced to the public, has
been completely generated/gathered;
11.7.3. if there is an underwriter, the underwriter has paid the necessary
payment in full or created the conditions specified in Article 11.7.1 and 11.7.2.
1
The law uses the terms “trading organization”, “securities trading organization” and “stock exchange”
interchangeably to mean the same organization.
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11.8. Until the decision of the Commission specified in Article 11.6 of this Law is
issued, the securities issuer shall not have the right to own or dispose of the proceeds
from the securities sale.
11.9. In order to successfully conduct the trade and purchase activity of the
securities [traded in the] primary market, the Commission or stock exchange may
demand the securities issuer to open a special account with an authorized savings
organization and transfer the proceeds required for the satisfaction of obligation
implementation into it in advance for the purpose of satisfying the obligation
implementation of the person who made the relevant offer.
11.10. Article 11.9 of this Law shall equally apply to the underwriter.
11.11. The proceeds generated through the selling of securities shall be spent for
the purpose specified in the securities introduction and if [the Commission and the stock
exchange???] deems it necessary, the Commission or the stock exchange may put
restriction on the disposal of the proceeds generated from the securities sale in
accordance with a certain schedule.
11.12. In the event the securities are not sold on the primary market within 1 year
after being registered at registration of publicly offered securities by the Commission,
the registration of such securities shall be revoked [by the Commission].
Article 12. Depository receipt
12.1. A legal person who has a right to issue shares in the securities market may
issue depository receipts.
12.2. The Depository receipt shall have the following types:
12.2.1. Mongolian Depository Receipt;
12.2.2. International Depository Receipt.
12.3. Mongolian Depository Receipt shall be understood as dual/simultaneous
trading of primary securities registered with the stock exchange in the territory of
Mongolia in the form of depository receipt on the securities market of other countries.
12.4. International Depository Receipt shall be understood as trading of
principal securities registered with a foreign stock exchange at a stock exchange
located in the territory of Mongolia through issuing of a depository receipt. The
International Depository Receipt may have specific name.
12.5. Security issuer may issue depository receipt through concluding
agreement with custodian who has special permission from the Commission.
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12.6. When trading International Depository Receipt in the territory of Mongolia,
the securities issuer shall inform the [Mongolian] public of the differences between the
laws and regulations of countries [Mongolia and other country]and the securities issuer
shall take all measures required for providing equal rights to the owners of principal
securities and the owner of the International Depository Receipt issued on the basis of
such [principal] securities.
12.7. The Commission shall determine the list of securities on which Depository
receipt may be issued on the basis of the proposal of the stock exchange.
12.8. The Commission shall determine the regulation on the issuance and
registration of a depository receipt related to the registration of publicly offered
securities and grant of permission [to whom] to sell.
Article 13. Company bond
13.1. A company which meets the relevant requirements may issue bond.
13.2. A company bond shall have a re-payment pledge or third party guarantee.
13.3. The detailed regulation on the requirements for a company to issue a
bond, registration of the bond and its public offering shall be determined by the
Commission.
13.4. The stock exchange, without undermining the requirements determined by
the Commission, may determine its own requirement.
Article 14. Issuing of securities in a foreign country by the company
registered in Mongolia
14.1. A company that initially registered its securities with the stock exchange
operating in the territory of Mongolia may issue securities which equal up to 90 percent
of its total issued securities in the securities market of a foreign country.
14.2. Company specified in Article 14.1 of this Law, when issuing securities in the
securities market of the foreign country, shall obtain permission from the Commission.
14.3. The Commission shall determine the procedures to issue permission
specified in Article 14.1 of this Law.
Article 15. Issuing of securities in Mongolia by the legal entity registered in
Foreign company
15.1. A legal entity that initially registered in any stock exchange of a foreign
country, may register or sell its securities with the stock exchange operating in the
territory of Mongolia with the permission of the Commission.
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15.2. When selling its securities [with a stock exchange within the territory of
Mongolia], a foreign legal entity is required to reflect [1] the similarities and differences
between the legislation of its own country and Mongolia in its securities prospectus. The
securities prospectus shall also include [2] regulation which provides shareholders a
possibility to exercise their rights and [3] potential risk arisen from the differences of
legislations of countries.
15.3. The regulation to issue permission specified in Article 15.1 of this Law and
requirements for the securities issuer shall be determined by the Commission.
Article 16. Issuing of derivative securities
16.1. A authorized person eligible to conduct securities dealing activities may
issue derivative securities.
16.2. The derivative securities shall be sold within scope of persons who has
authorized to conduct the activities of the securities broker, dealer, underwriter,
investment fund and professional investors at the securities market.
Article 17. General obligation of the securities issuer
17.1. The securities issuer shall have the following general obligations:
17.1.1. to make the decision to issue securities by the meeting of its
authorized organization, and to issue securities in accordance with the relevant
procedures;
17.1.2. to submit/deliver a report and information related to the securities
issuer and trading of its issued securities, in accordance with relevant
methodology and forms within specified period;
17.1.3. to have more than 2 independent members in its Board of
Directors;
17.1.4. to appoint and employ eligible person as governing persons;
17.1.5. to spend the proceeds generated through the sale of the securities
on the primary market only for the purpose specified in the securities
introduction, and in the event the implementation of the project changes from the
schedule specified in the securities introduction, to inform public and
shareholders from time to time;
17.1.6. to submit a semi-annual, and annual financial balance sheet,
approved by an approved audit organization to the Commission and the stock
exchange within the period specified in Article 13 of the Law on Accounting2
;
2
Law on Accounting - published at “State Information” bulletin, No.1, 2002
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17.1.7. to publish the abstract of the financial balance sheet together with
the auditor’s opinion through the press and media according to the procedures
determined by the Commission;
17.1.8. a joint stock company, with registered securities, shall submit to
the Commission materials from a regular shareholders meeting together with its
decision before 1 June, and irregular meeting materials within 20 days after the
holding of the meeting;
17.1.9. to implement the principles of company governance approved by
the Commission.
17.2. The Securities Commission shall determine the procedures on information
on market prices of securities, trading amount, information possible to influence the
process and on distribution of information to the public.
Article 18. Demanding of information related to securities issuer
18.1. In the event of the the following circumstances, or if deemed such
circumstances might be created, the Commission within a defined period of time and
using appropriate means and methods is entitled to demand information from the
securities issuer and other person related to the securities issue:
18.1.1. conducted or conducting deceiving, defrauding or other illegal
activities of its own or others’ obligation implementer, or unfairly dealt with
shareholders;
18.1.2. established the company for the purpose of deceit, defraud or
other illegal intention;
18.1.3. the founder and the authorized official of the company, when
founding the company or implementing the management, deceived the company
or its shareholders, or conducted other illegal activities;
18.1.4. failed to deliver the information that should be delivered to the
shareholders.
18.2. The Commission may execute the implementation of rights specified in
Article 18.1 of this Law through the Commission’s inspection officer.
18.3. The Commission and the inspection officer authorized by the Commission
are entitled to demand the information specified in Article 18.1 of this Law from any
person, which is deemed to possessed such information.
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18.4. In the rights specified in Article 18.1 of this Law, the rights such as to obtain
copies of the documents, to obtain the original copy of all or some parts deemed
necessary, to have explanations made by person who worked or are working in the
company, and if some documents are not provided, to demand realistic information from
the person who is obliged to provide such information, place and person the information
is held shall be equally apply.
Article 19. Making of a claim with the court about the illegal activities of the
securities issuer
19.1. The Commission shall make claims on behalf of shareholders with the
court, [1] if the Commission deems that the securities issuer or its governing person
damaged the interests of the shareholders by conducting an illegal activity or [2] if the
Commission deems that court claim is necessary required.
19.2. The Court shall issue the following decision if it considers that the securities
issuer or its authorized official caused damage to the company or shareholders:
19.2.1. to stop the activity causing damage;
19.2.2. to take measures required for the remedy of the violated right in
accordance with the condition specified in the court decision;
19.2.3. to appoint a receiver of right or a custodian of the asset, to
determine their rights and obligations, and to define the amount of salary and
incentives of a receiver and custodian; and
19.2.4. to order the company or certain shareholders to purchase the
shares from other shareholders, in the event the company makes the purchase,
to make a decision deemed appropriate for the regulation of the company’s
future activities, such as to decrease the shareholders’ asset or divide or
liquidate the company etc.,
19.3. If amendments were made to the company’s charter by a court decision, it
shall be prohibited to make any changes and amendments into the charter which
contradicts with the said decision.
Article 20. Giving of assignment to securities issuer
20.1. The Commission may issue an assignment to securities issuer requiring it
to take certain measures within a deadline for the purpose of ensuring the
implementation of the legislation, correcting a violation, intercepting the illegal activities,
and protecting the investors’ interest.
20.2 The Company which received the assignment specified in Article 20.1 of this
Law is obliged to implement it.
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20.3. The Commission may have the assignment implemented through a
complaint filed with the court about the company and its official those failed to
implement the assignment specified in Article 20.1 of this Law.
Sub-chapter three
Making of an offer to purchase a company
Article 21. Making of an offer to purchase a company
21.1. Offer to purchase a company shall be made in accordance with this Law
and regulations prescribed by this Law.
21.2. An offer to purchase a company shall be made in the following form:
21.2.1. making of an offer to purchase the shares of the company by a
shareholder of the company alone or jointly with the affiliated person, or person
who does not hold any shares of the company, all or part of the shares of the
company on the voluntary basis;
21.2.2. compulsory offer by the shareholder, who purchased the
controlling block of shares of the company alone or jointly with affiliated person,
to purchase all the remaining shares of the company for the purpose of
exercising obligation specified in the Company Law.
21.3. A person who makes an offer to purchase the company shall inform the
Commission of the offer and obtain [the Commission’s] permission.
21.4. A person who makes an offer to purchase the company, when offering the
shareholders to purchase the shares of the company, shall comply with the procedures
specified in the Company Law, and provide any persons with information related to such
purchase.
21.5. The following information should be provided to the public regarding the
purchase of the Company:
21.5.1. the name of the offeror to purchase the company;
21.5.2. the number and amount of total shares being offered to purchase
and the minimum price of a single share;
21.5.3. the financial resource purchase the shares;
21.5.4. project and proposal to develop the company.
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21.6. The minimum validity period of an offer to purchase the company shall be
2 months and maximum period shall be 6 months.
21.7. The price, offered by the offeror to purchase the company, the share
[price] shall be determined in an amount not less than the higher of the average value of
the share in the last 6 months, or if offeror is a shareholder, then the maximum
purchase value purchased the share of the company by the offeror, and such value
shall not be less than the nominal price of such shares.
21.8. An offeror to purchase the Company, when making an application
requesting the offer of purchase, shill inform a shareholder who is holding more than 5
percent of the total shares of such company and board of directors of the company of
the offeror’s offer.
Article 22. Activities of purchasing the company
22.1. The Commission shall determine the regulation on making an offer to
purchase the company and activities related to it.
22.2. The following may be included in the regulation specified in Article 22.1 of
this Law:
22.2.1. the method and form of making an offer;
22.2.2. the request to register the offer, permit or refuse to permit;
22.2.3. procedures to inform the public of the offer;
22.2.4. measures to be taken by the company’s management in relation to
the purchase offer;
22.2.5. the rights, obligations and liabilities of the participant parties in the
offer making activities;
22.2.6. the content of the offer to purchase the company document and
the period to introduce or inform [the shareholders of the company];
22.2.7. period of offering activities;
22.2.8. limitation on the trading before and during the process of offering;
22.2.9. guarantee to implement the purchase activity;
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22.2.10. inspection of the activities of the securities broker, securities
advisor, employees of the company, the offeror and/or other persons
participating in the activities;
22.2.11. to issue demand to parties participating in the offer making
activities;
22.2.12. the powers of the Commission to dismiss any one of the parties
from certain requirements or obligations specified in laws and regulations
adopted by the Commission;
22.2.13. information to the public about the influential shareholders;
22.2.14. prohibitions of the activities of purchasing the company;
22.2.15. other issues considered by the Commission required for properly
conducting the activities of purchasing a company.
22.3. It is prohibited to make a purchase offer in violation of the regulations
adopted by the Commission, or conduct any activities directed at purchasing the
company without making an offer.
22.4. If the person who has an obligation to mandatorily purchase all the voting
shares of the company fails to implement its obligation, all the shares illegally
transferred into the ownership of of such person or affiliated person with him shall be
considered as non-voting and such shares shall be sold on in a forced manner.
22.5. The Commission shall determine the regulation to enforce the selling
activities specified in Article 22.4 of this Law.
22.6. Information about the obligation of the person, who is obliged to purchase a
controlling block of shares of the company and make offer to mandatory purchase,
organization which conduct securities saving activities, within 5 days after the purchase
of control package, to the Commission and is obliged to inform public through its
webpage.
22.7. The Commission shall inform the public about the shares with non-voting
rights through its web page within 15 days.
CHAPTER THREE
REGULATED ACTIVITIES OF THE SECURITIES MARKET
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Sub-Chapter four
General regulation
Article 23. Regulated activities
23.1. The following activities shall be regarded as regulated activities of the
securities market:
23.1.1. securities brokering activities;
23.1.2. securities dealer's activities;
23.1.3. securities advising activities;
23.1.4. conducting securities management;
23.1.5. underwriting activities;
23.1.6. securities ownership right registration activities;
23.1.7. securities trading clearing activities;
23.1.8. securities trading payment activities;
23.1.9. securities depository activities;
23.1.10. custodian’s activities;
23.1.11. organizing securities trading;
23.1.8. assessing the capacity to obtain loan:
23.1.9. other activities specified by legislation to be conducted with special
license or defined by the Commission as regulated.
23.2. Activities specified in Article 23.1 of this Law shall be conducted by a legal
entity which has been issued a special license by the Commission.
Article 24. Principles of the regulated activity
24.1. The regulated person shall adhere to the following principles in its activities:
24.1.1. to comply with legislation, regulations and rules and publicly
recognized norms;
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24.1.2. to study and know the investment purpose and capacity of the
customer in accordance with relevant regulation before rendering service;
24.1.3. to provide each customer with required information and advice
required for making knowledgeable decision on investment;
24.1.4. to avoid creating a conflict of interest with customer, and inform the
customer if a conflict of interest is created;
24.1.5. to avoid considering its own personal interest over the customers,
to avoid creating a condition of conflict of interest;
24.1.6. to separate and store appropriately the assets of each customer so
as to ensure the assets safety;
24.1.7. to have sufficient financial resources to conduct activities, and
overcome the risks associated with such business;
24.1.8. to appropriately organize and review its internal activities;
24.1.9. to properly maintain and store record of primary records and
documents;
24.1.10. to have sufficient human resources required for the work place, to
have defined the duties of the employees optimally, and have supervision over its
implementation of duties of the employees.
Article 25. Package of regulation of the regulated activities
25.1. Regulated activities in the securities market shall be regulated by the
collection of regulation approved by the Commission.
25.2. The collection of regulated activities regulations consists of the following
regulation, rules, methodology, guidance, condition, requirements and norms:
25.2.1. list of documents for applying for the special license specified in
this Law;
25.2.2. condition and requirements for the legal entity to conduct regulated
activity;
25.2.3. methodology and requirements for determining the solvency of the
legal entity to conduct regulated activity, and control over it;
25.2.4. regulation on the raising, distributing and controlling the risk fund,
reserve fund and other funds of the legal entity to conduct regulated activity;
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25.2.5. the amount of assets, of the legal entity to conduct regulated
activity, in its risk and reserve funds, and condition and requirements on that for
the investment;
25.2.6. maximum and minimum amount of legal entity’s service fee, to
conduct regulated activity;
25.2.7. requirements for the action plan of the legal entity to conduct
regulated activity;
25.2.8. regulation to deliver the information to inform the public or publish
specified in this Law to the Commission,;
25.2.9. regulation on the prohibition of misleading or false advertising by
regulated persons or [done] on behalf of [regulated persons];
25.2.10. regulation and guidance on providing advice to customers and
documenting such advice;
25.2.11. regulation on providing information to customers about the risk
associated with securities;
25.2.12. the condition and rate of fees to charge for providing information
and documents to customer;
25.2.13. regulation to regulate a conflict of interest between regulated
persons and customer;
25.2.14. regulation to receive and implement a customer’s orders or
subscriptions;
25.2.15. regulation to determine an eligible person;
25.2.16. condition to temporarily suspend the regulated activity;
25.2.17. regulation to make offer to purchase a company;
25.2.18. requirements for the securities issuer and the regulation on the
registration of securities;
25.2.19. regulation on the preparation of the activities to make a public
offering of the securities and a methodology to process securities introduction;
25.2.20. regulation on the storing and transferring of non-government
archive documents by the legal entity participating in securities market;
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25.2.21. guidance on preparing reports, information and application as
specified in this Law;
25.2.22. the condition and requirement for a legal entity which is to open a
branch or representative office, and to conduct its activities through thereof;
25.2.23. regulation on the consideration of application made during the
transfer and unification of parts of its activities;
25.2.24. regulation on conducting of activities of liquidation and re-
capitalization of regulated persons out of the procedures provided for in Law on
Bankruptcy and the Company law;
25.2.25. payments and fees to be paid to the Commission;
25.2.26. regulation on informing about the person with a common interest;
25.2.27. others as required.
25.3. If [the Commission] deems it necessary, the Commission shall establish
detailed regulations, rules and norms for each type of regulated activities, in accordance
with this Law.
Sub-chapter five
Issuing of special license and right
Article 26. Making of an application requesting special license
26.1. A legal entity that requests to obtain a special license to conduct regulated
activity specified in this Law shall submit an application in the prescribed form to the
Commission.
26.2. When applying for the special license as specified in Article 26.1 of this
Law, the following documents shall be attached as well as those documents specified in
the Law on Special License of Business Activities3
:
26.2.1. the type of activities to be conducted;
26.2.2. the conditions which satisfy the minimum amount of investment,
assets and current asset;
26.2.3. a certified copy of the company charter;
3
Law on Special licensing of Business Activities – published at “State Information” bulletin, No.6, 2001
25

26.2.4. a business plan which reflects projected profit for the first 3 years;
26.2.5. as for the securities settlement, clearing and depository
organization, a detailed introduction on how to coordinate its activities with the
commercial network of stock exchange, or the dealers commercial center;
26.2.6. shareholder solvency and reference letter certifying the non-
existence of any debt with banking and financial organizations;
26.2.7. a risk management plan;
26.2.8. a sufficiency of professional and skilled human resource;
26.2.9. whether there is sufficient facility, technical plan/details, equipment
and computer networks;
26.2.10. other information necessary for the Commission to determine
whether the applicant is an eligible person to conduct such activities;
26.2.11. evidence which certifies that the person is eligible for a special
license.
Article 27. Issuing of Special license
27.1. The Commission shall issue a special license in the case where the
applicant meets the following conditions:
27.1.1. confirmation that the person is an eligible person for the issuance
of special license and such right;
27.1.2. to have no less than three members who have been granted the
right to conduct such activity by the Commission;
27.1.3. to have shareholders or own capital in an amount not less than the
amount established by the Commission;
27.1.4. to have a work place, equipment, technical plan/details, and
software sufficient to meet the requirements;
27.1.5. met other requirements and conditions established by the
Commission.
27.2. The Commission shall have the right to amend or revoke the conditions for
a special license. In this case, the special license-holder shall be informed of the
conditions.
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2.3. A special license shall be issued for a period of 1 year, and if the fee of the
annual regulatory service is paid before the expiry of the special license, it shall be
considered that the validity of special license is extended for one year.
Article 28. Requirements to obtain Special license
27.1. It is prohibited for a person to conduct regulated activities without being
granted a special license by the Commission and to mislead as if conducting such
activities.
27.2. The type of activities that may be conducted by a license-holder shall be
noted on the special license and only those activity shall be conducted by the special
license-holder.
Article 29. Suspending of Special license
29.1. In the following cases, the Commission may suspend the special license for
a period of up to 3 months, or until the prescribed requirements are satisfied:
29.1.1. on request of the license-holder;
29.1.2. violations of this Law and regulations adopted by the Commission
and by the securities trade payment clearing organization;
29.1.3. violation of the conditions and requirements of a special license or
right, or has became unable to meet the conditions and requirements;
29.1.4. failure to implement an order issued by the Commission;
29.1.5. failed to provide information demanded by the Commission, or
provision of misleading information;
29.1.6. became ian ineligible person to conduct such activities due to the
reasons specified in the law;
29.1.7. failure to pay the regulatory service fee within the prescribed
period.
29.2. Legal entities whose special licenses have been suspended by the
Commission may submit a request to restore its special license to the Commission after
remedy of the grounds for the suspension within the specified period.
29.3. The Commission shall resolve the request mentioned in Article 29.2 within
15 business days.
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Article 30. Revocation of Special license
30.1. The Commission shall revoke the special license under the following
circumstances:
30.1.1. at the request of the special license holder;
30.1.2. no request has been received by the Commission on the
restoration of the special license, and the violation has not been remedied during
the period of suspension of special license;
30.1.3. the Commission has considered that the legal entity is no longer
capable to continue to conduct the activities under the special license in the
future;
30.1.4. the regulatory service fee has not been paid within the prescribed
period;
30.1.5. the legal entity went bankruptcy, or liquidated.
30.2. The Commission, when taking measures as mentioned in Article 29 and 30
of this Law, shall deliver its decision in written and it shall include The following:
31.3.1. grounds of the decision;
31.3.2. period for the decision to come into force:
31.3.3. if required, the period and the condition to suspend or revoke the
special license in accordance with such decision.
Article 31. Outcomes resulting from the suspension and revocation of
Special license
31.1. Suspension and revocation of the special license shall not serve as ground
to terminate any valid agreements and transactions concluded by such entity, or release
such legal entity from any rights, obligations and liabilities under them.
31.2. Suspension and revocation of the special license shall not serve as ground
not to impose any administrative and criminal liability, or to release from any liability.
Article 32. Measures to be taken by the Commission
32.1. If the Commission has suspended, revoked or restored a special license it
shall publicly announce the suspension, revocation or restoration of a special license.
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32.2. In the case the special license has been revoked or suspended, the
Commission shall demand that the documents related to the customers of regulated
persons and their assets shall to be sealed or documents be handed over [to the
Commission], or the assets are transferred into a special account..
32.3. If the special license has been revoked or suspended, the legal entity is
prohibited to conclude any agreement, negotiation or transaction other than those
permitted by the Commission. Only the activities directed at protecting the customers’
interest may be permitted by the Commission.
32.4. Any agreement and negotiation concluded during the period of suspension
and revocation of the special license without the permission of the Commission shall be
void and such legal entity, or guilty person shall be held liable for the damage caused to
others related to such void agreement.
32.5. The Commission shall obtain an explanation from regulated persons before
taking measures specified in Article 30 of this Law and approve the method and the
form used by regulated persons to make such an explanation .
Article 33. Right to make complaint
33.1. A regulated person who refuses to accept the refusal of the Commission to
grant, suspended or revoked a special license, shall make a complaint to Supervisory
Board at the Commission within 14 days from the receipt of such notice of the decision.
33.2. Making a complaint in accordance with Article 33.1 of this Law shall not
serve as ground to suspend the implementation of the decision of the Commission;
however, the Supervisory Board may temporarily suspend a decision of the
Commission.
33.3. Upon the review by the Supervisory Board of the complaint specified in
Article 33, the Supervisor Board shall issue any one of the following decisions:
33.3.1. to revoke the decision of the Commission;
33.3.2. to uphold the decision of the Commission and dismiss the
complaint;
33.3.3. to make the required amendments to the decision of the
Commission.
33.4. The Commission is obliged to accept and implement the decision of the
Supervisory Board. If a person does not agree with the decision of the Supervisory
Board, the person may file a claim with the court. .
Article 34. Granting of a right to professional
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34.1. A professional that works for a legal entity that conducts regulated
activities shall be granted the right [to conduct the regulated activities] from the
Commission as specified in this Article.
34.2. The Head of the Commission shall grant to a citizen who has passed the
Specialization Commission’s professional examination the right to work for a legal entity
that conducts regulated activities for a period of 3 years.
34.3. The professional examination shall be organized by a specialization
commission (“Specialization Commission”) at the Commission. The Specialization
Commission shall have 9 members.
34.4. The composition of the Specialization Commission shall be approved by
an order of the Commission, on the basis of a proposal made by a relevant
organization: one member will be from the State central authority in charge of financial
matters, three members from self-regulatory organization4
and 5 members appointed
by the Commission. Members of the Specialization Commission shall have a
background in economy, finance, investment and law.
34.5 The head of the Specialization Commission shall be selected by a majority
vote of the members.
34.6. The Commission shall regulate the Specialized Commission that
administers the professional examination that grants of right to professionals,
suspending, or revoking of such rights.
34.7. A citizen who takes the professional examination, shall have participated
in training organized by the Commission or a self-regulatory organization.
Sub-chapter six
Types of Regulated activities
Article 35. Broker’s activity
35.1. Brokerage includes the execution of brokerage activities on the basis of
the agreement concluded with the customer related to the purchase, sell (includes
selling of securities, or purchasing of securities from the primary market by through
assignment by the securities issuer), and trade of securities on behalf of the customer
using the customers own asset.
35.2. Unless otherwise provided in the legislation and specifically provided for in
the agreement, the broker may purchase, under the broker’s name, the unsold
4
See Article 72
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remaining securities of his customer or the securities issuer, which was offered on the
primary market.
35.3. The broker is obliged to comply with the legislation, regulations and rules
approved by the Commission, self-regulatory organization with membership, the stock
exchange, and securities trade payment clearing organization in its activities.
35.4. The relations between the broker and the broker’s customer shall be
based on an agreement. The standard conditions of the brokerage agreement and
procedures to conclude a brokerage agreement shall be determined by the
Commission.
35.5. A sample of a brokerage agreement, formalization and procedures to
conclude a brokerage agreement shall be regulated by a regulation approved by the
Commission and the rules of the broker.
35.6. The broker is obliged to implement the assignment as issued by the
broker’s customer fairly in accordance with the conditions and requirements of the
brokerage agreement, and if the conditions of the brokerage agreement are changed to
inform the customer and renew the assignment.
35.7. Despite the fact that the broker conducts dealer’s activities at the same
time, the broker is obliged to implement the customer’s assignment on a priority basis.
35.8. A broker is obliged to inform the customer of a conflict of interest before
concluding a brokerage agreement, or immediately inform the customer of a conflict of
interest which is created after concluding a brokerage agreement.
35.9. Any material damage to the customer due to the failure of the broker to
inform the customer of conflict of interest before concluding a brokerage agreement or
immediately inform the customer of a conflict of interest created after concluding a
brokerage agreement shall be borne by the broker’s asset in accordance with the
prescribed procedure.
35.10. The broker is obliged to open an account with an authorized and
independent financial organization which conducts monetary saving activities for each
of its customer, store the monetary assets of the broker’s customers in the account, and
protect it reliably, and it is prohibited to dispose such asset without the permission of the
customer.
35.11. Unless otherwise provided in the law and in the brokerage agreement,
the broker is obliged to credit the monetary asset received [by it] from its customer as
defined in an executed brokerage agreement, and/or the money received from other
persons in the name of the customer in accordance with the brokerage agreement
concluded by a power of attorney granted by [the broker’s] customer in the account of
such customer.
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35.12. It is prohibited for the broker to satisfy the broker’s obligation to others
from the asset of a customer that are in the possession of the broker.
35.13. The broker shall not mix or combine its own asset with the asset of other
customer except in case where the executed brokerage agreement is for the purchase
of securities from a loan made to the broker’s customer or other payment obligation on
behalf of its customer.
35.14. A customer may give the broker to the right to dispose of the customer’s
asset as defined in an agreement; the agreement must include conditions regarding the
pledge or guarantee used to satisfy the obligation to repay the asset.
35.15. The asset specified in Article 35.14 of this Law shall be taken and
deposited in a separate account from the other assets to which no permission was
given by the customer.
35.16. The standard conditions of the margin agreement and detailed regulation
related to the concluding of an agreement shall be determined by the Commission.
Article 36. Dealer’s activities.
36.1. The dealer’s activities includes the offering to the public the purchase or
sell of certain securities at a certain price on behalf of and in the customer’s name, and
upon an order to purchase or sell securities is received the dealer is obliged to
implement such order..
36.2. Except for the price of securities specified in Article 36.1 of this Law, the
dealer may offer under the following conditions:
36.2.1. the maximum and minimum amount of securities to be purchased
or sold;
36.2.2. the validity period of price offered to the public;
36.2.3. other offers not prohibited by law.
36.3. A dealer may change or revoke the offer it makes to the public in the same
manner it was first offered.
36.4. A dealer is obliged on an undisputed basis to accept an offer to purchase
or sell securities received as a response the dealer’s valid offer made to public.
36.5. For the purpose of satisfying the obligations specified in Article 36.4 of this
Law, the stock exchange may demand a certain amount of pledged asset to be
deposited in a special account from the dealer.
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36.6. Loss caused by the dealer’s refusal from implementing the dealer’s offer
made to public shall be solved through court procedure.
Article 37. Securities advisor’s activities
37.1. A securities advisor’s activities include research and analysis required for
determining the securities to be offered on the primary market on the basis of an
agreement, and providing independent professional advice for a fee on the price,
conditions and terms of the purchase or sale of the securities.
37.2. Research or analyses conducted by a legal entity with a right to conduct
regulated activity, or any one investor, for the purpose of its own activities and
investment decision, or conducting research for public purpose and publicizing the
result shall not be considered as a securities advisor’s activities.
Article 38. Securities management activities
38.1. Securities management activities means activities to manage securities
and assets related to securities which are under ownership of the customer/trustee as
the owner on the basis of an asset management agreement.
38.2. The losses incurred by a customer due to a conflict of interest unknown in
advance between the securities manager and its trustee-customer, or between several
trustee-customers of such securities manager shall be borne by the securities manager.
38.3. In the event the customer is a professional investor, the securities
manager execute an agreement related to derivative securities.
38.4. Detailed regulation to conduct securities management activities shall be
approved by the Commission.
38.5. The management of investment fund or pension fund shall be regulated by
a special law adopted in conformity with this Law.
Article 39. Underwriter’s activities
39.1. Underwriter’s activities conducted by a legal entity which has been
granted a special license include professional underwriter’s activities related to the
public offer of a legal entity’s issued securities or arranging such securities on the
primary market on the basis of the executed agreement.
39.2. A special license to conduct underwriter’s activities shall be issued by the
Commission to legal entity which has a valid special license to conduct either broker’s
activity or dealer’s activity, and who meets the relevant requirements.
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39.3. The revocation of either a broker’s or a dealer’s if both activities are
licensed, then both special licenses) (special licenses of a legal entity with a special
license to conduct underwriter’s activity shall serve as ground to revoke the special
license of such legal entity to conduct underwriter’s activities.
39.4. Underwriting service shall be rendered under any one of the following
condition:
39.4.1. firm means the underwriter buys all the securities of the securities
issuer offering to public;
39.4.2. undertake using best efforts the underwriter does all the best effort
required to sell the securities by introducing the securities to its own investors;
39.4.3. underwriter buys remaining unsold securities after offering to the
public;
39.4.4. other conditions specified in the underwriting agreement.
39.5. Underwriting services may be rendered by a single legal entity or jointly
with other authorized legal entities. In this case, the parties shall conclude a
cooperation agreement and the agreement shall mandatorily include the following
conditions:
39.5.1. the responsibilities of each parties that render the underwriter’s
service in cooperation;
39.5.2. the allocation of the rights, obligations and liabilities of the parties
to render underwriter’s service in cooperation;
39.5.3. the validity period of the agreement.
39.6. The regulation for conducting underwriting activities and the standard
condition of the underwriting agreement shall be determined by the Commission.
Article 40. Securities ownership right registration activities
40.1. The securities registrar activities include activities to collect, register, store
and publicly provide information related to certain securities, the securities issuer or
owner, and actions and process related to securities ownership right by the securities
owner (including the certified owner /trustee/).
40.2. The securities ownership database for the securities ownership rights
registration shall be understood as a unified registration database containing
information about the ownership of securities, the securities, the owners, and the
owner’s rights and obligations.
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40.3. A person who is conducting the securities ownership registration is obliged
to store for a specified period, maintain the safety and provide others in accordance with
relevant procedures without any interference with the securities ownership registration
information and documents.
40.4. Securities ownership registration shall be conducted by a legal entity.
40.5. The regulation to conduct securities ownership registration shall be
established by the Commission.
40.6. A legal entity conducting securities ownership registration is prohibited
from disposing of securities under a person’s ownership which is under securities
registration on its own initiative without the permission of the securities owner.
40.7. A securities issuer may obtain a copy of the registration of securities
owners for securities issued by the securities issuer, once a year free of charge and in
other cases the fee shall be determined by an agreement concluded between the
parties.
40.8. A person conducting securities ownership registration who is found guilty
shall be held liable for the loss caused due to rendering of false, incorrect and
incomplete information to another person.
40.9. If there are grounds, the person who is conducting securities ownership
registration is entitled to refuse to make certain registration, to examine certain
information suspending the securities registration activities or have the information
inspected by the authorized [Government] authorities.
40.10. The beneficial securities owner or the legal securities owner are both
obliged to submit the information required for securities registration correctly and in a
timely manner.
40.11. The registration of securities ownership shall be conducted through an
executed agreement with only one legal entity conducting registration activities and it is
prohibited to be registered twice.
40.12. Securities registration under the name of a legal securities owner shall
not restrict the ownership rights of the beneficial securities owner who is the securities
settlor and such securities shall not be used to satisfy the obligations of the legal
securities owner.
40.13. The maximum fee for rendering securities ownership r registration
service shall be determined by the Commission.
Article 41. Securities trading clearing activities
35

41.1. Securities trade clearing activities are activities to determine the payment
rights and obligations of the parties under an executed agreement or transaction
concluded between the participants related to securities trading at the conclusion of
such a trade and within the specified period of each agreement or in a integrated
manner, to make relevant financial registration and clearing, to ensure the preparation
of the relevant payment, to submit the invoice of the securities trading to the relevant
organization, to make the relevant financial transaction in accordance with the payment
report and endorse, and deliver the relevant information to securities depository and
registration organization.
41.2. A Legal entity that is conducting securities trade clearing activities shall
establish a special fund for the purpose of decreasing the risk of revocation of
transactions made during the securities trading process.
41.3. The regulation of securities trade clearing activities shall be determined by
the Commission.
Article 42. Securities trading payment activities
42.1.Securities trade payment clearing are such activities to transfer the
securities purchaser’s purchase payment into the securities seller’s account in
accordance with the invoice received from the organization that conducted the
securities trade clearing activities at the conclusion of the securities trading and to
transfer a defined number of securities from the securities trader’s account into the
purchaser’s account using specialized equipment for the delivery of the invoice between
the securities depository and monetary depository organizations making the payment at
once within prescribed period.
42.2. The securities trade payment transaction shall be done only once and it
shall not be refunded.
42.3. If it is impossible to make the relevant payment transaction or the relevant
cash or securities were not deposited in the relevant account, when settling the invoice
received from the securities trade clearing organization in accordance with the relevant
procedures and within the specified period, such payment transaction shall not be
made.
42.4. In the event the circumstance specified in Article 42.3 of this Law have
arisen, the securities trade payment organization shall immediately inform the securities
trade clearing organization, and the securities trade clearing organization shall work
with the securities trade organization on this issue to either make a decision to correct
the faulty invoice or revoke the trading agreement, and inform the securities trade
clearing organization.
42.5. The issue whether to conclude the invoice of the payment transaction
specified in Articles 42.3 and 42.4 of this Law shall be decided within 1 business day,
36

and if a fault is not corrected within this period, such trading agreement or related
invoice of the payment transaction shall be considered as void.
Article 43. Securities depository activities
43.1. Securities depository is the activities to deposit securities and conduct the
registration of the securities ownership under deposit.
43.2. Regulation of the securities depository activities, management,
organization and structure of the legal entity conducting such activities, and the
condition and requirements of the activities shall be determined by the Commission.
43.3. The securities depository activities shall be conducted by a legal entity
and the securities shall be deposited on the basis of a written and executed securities
depository agreement between the owner.
43.4. Unless otherwise set forth in the securities depository agreement, the
securities depository agreement shall not provide a person depositing securities with a
right to dispose of the securities.
43.5. It is mandatory that the securities depository agreement include the
following:
43.5.1. the subject matter being deposited as defined in the agreement;
43.5.2. the rights and obligations of the person depositing the securities on
the securities being deposited, and procedures related to any transaction and
provide permission of the securities owner to make such transaction
43.5.3. the validity period of the agreement;
43.5.4. the service fee under the agreement, and procedures to make
such a payment;
43.5.5. the procedures to report the securities owner of the securities
being deposited;
43.5.6. others.
43.6. A legal entity conducting securities depository activities is obliged to
inform the securities owner of information received from the securities issuer relating to
securities under deposited and the person who is conducting the securities registration
activities of changes in the securities ownership to be included in relevant registration
and to register the change in the securities ownership.
37

43.7. If an authorized legal entity which conducts securities depository activities
mutually agrees under an executed agreement with a customer, it may own certain
securities as a legal owner.
43.8. Legal entity which conducts securities depository activities does not have
a right to deposit monetary asset and it shall specifically deposit securities dividend and
shares and securities sell payment in the account opened in the name of the customer
with authorized financial organization which conduct monetary depository activities.
43.9. It is prohibited for a legal entity conducting securities depository activities
to satisfy its obligations from the securities under deposit with the securities depository
organization in a customer’s account n or monetary asset related to such securities.
Article 44. Custodian’s activities
44.1. The custodian’s activities are activities such as to deposit and ensure the
completeness of the securities in the ownership of the securities owner, and to render
services to the securities owner in relation to the exercise of other rights of the
securities owner.
44.2. The custodian’s activities may be conducted only by a controlled or
subsidiary company of the parent company which has a right to conduct banking
activities.
44.3. A person who is conducting custodian’s activities is prohibited from
concluding any agreement or transaction with any other person other than the owner of
the securities being deposited or to dispose of the securities.
44.4. The regulation to conduct custodian’s activities shall be established by the
Commission.
Article 45. Securities trade organizing activities
45.1. Securities trade organizing activities means activities to render services to
create a condition to conclude agreement related to the purchasing and selling of
securities at securities primary and secondary market.
45.2. The securities trade organization shall be a stock exchange.
45.3. The securities trade organization is obliged to provide free of change to
the public the following information:
45.3.1. procedures to participate in securities trading;
45.3.2. procedures to enter securities into the securities trading;
38

45.3.3. procedures to conclude securities a trading agreement;
45.3.4. procedures to register a securities trading agreement;
45.3.5. procedures to implement the securities trading agreement;
45.3.6. rules on the prohibition of inflating securities price;
45.3.7. schedule to render services to organize securities trading;
45.3.8. other information specifically provided to the public according to
the legislation and internal code.
45.4. The securities trade organization shall provide public information each
purchase and sell agreements of securities concluded during the process of securities
trading as follows:
45.4.1. the date, validity period and registration number of the agreement;
45.4.2. the registration number and distinguishing mark of the securities
as it is the subject matter of such agreement;
45.4.3. unit price of the traded securities;
45.4.4. number of total traded securities;
45.4.5. other information prescribed to be provide to the public under
legislation and international code.
Article 46. Stock exchange
46.1. The stock exchange may organizing securities trading and do the following:
46.1.1. currency exchange;
46.1.2. commodity exchange (trading of financial instrument related to the
transaction of commodities);
46.1.3. securities trading clearing;
46.1.4. press and publishing on securities;
46.1.5. leasing of certain properties for charge for the purpose of
organizing securities trading in accordance with established regulations.
39

46.2. The stock exchange is prohibited from conducting other activities other than
set forth in Article 46.1 of this Law.
46.3. The stock exchange that conducts securities trade clearing shall have a
special unit to conduct.
46.4. The managing, executive or supervising official of the stock exchange is
prohibited from holding any position in regulated legal entity which participates in
securities trading.
46.5. It is prohibited for a single person or several persons with common interest
to hold more than 20 percent of the total securities issued by the stock exchange.
46.6. The representatives of the Commission with voting right shall on the Board
of Directors of the stock exchange.
46.7. The stock exchange shall keep records of securities to be traded on the
stock exchange. Activities related to securities registration or de-registration, or changes
in such registration shall be conducted by a professional registration council.
46.8. The members of the registration council of the stock exchange shall not
have voting rights on the following issues:
46.8.1. on the issues related to the securities issued by a securities issuer;
46.8.2. a person related to securities issuer, or its controlled, subsidiary or
twin5
company;
46.8.3. if employed by the tlegal entity of the securities issuer, or
employed in its controlled, subsidiary or twin company;
46.8.4. if there is other condition with a conflict of interest.
Article 47. Participating in the trading of stock exchange
47.1. In the trading of the stock exchange, only authorized brokers and dealers
with membership in such stock exchange shall participate.
47.2. In the event the securities clearing activities is conducted by special
authorized organization, it shall not be considered that such organization has
participated in the trading of the stock exchange.
47.3. Other person unless specified in Article 47.1 of this Law shall participate in
the trading of the stock exchange through authorized broker and dealer.
5
Undefined in the Company Law and this Law.
40

Article 48. Conditions and requirements for the activities of the stock
exchange
48.1. The stock exchange is obliged to operate a meeting according to the
following conditions and requirements:
48.1.1. to approve the regulation on the trading and participation in the
trading of the stock exchange;
48.1.2. to provide relevant service when trading securities issued on the
basis of the transaction of derivative securities or commodities traded on the
stock exchange;
48.1.3. to approve regulation on the registration or de-registration of
securities at the securities registration or entering of such trading at the stock
exchange;
48.1.4. to approve regulation on the registration or de-registration or
trading of securities;
48.1.5. to have the rules and regulations, and their changes or
amendments prescribed to be approved by the stock exchange as specified in
this Law, endorsed by the Commission in accordance with relevant procedure;
48.1.6. to inspect each agreement concluded during the trading of the
stock exchange, and control the conduct of illegal activity;
48.1.7. to organize the trading of the stock exchange within prescribed
period on a fair basis without any shortcomings.
48.2. The stock exchange, for the purpose of implementing its obligation
specified in Article 48.1.6 of this Law, is entitled to demand necessary information from
participants in the trading, securities owners, and securities issuers.
48.3. The stock exchange is entitled to establish the amount of service fees and
discounts for its service.
Article 49. Activities assessing the capacity to obtain a loan
49.1. Activities to assessing the capacity of a securities issuer to obtain a means
third party independent activities to determine the capacity of a securities issuer to
obtain a loan on the basis of specially prepared methods and methodologies.
49.2. If the authorized person who conducts activities to assess the capacity to
obtain a loan met the relevant condition and requirements, rating can be established by
41

their quality, risk and benefit through making analyses on certain types of financial
instrument traded on the primary market.
49.3. The authorized legal person who conducts activities to assess the capacity
to obtain a loan is prohibited from rendering service to customers with a conflict of
interest, determine false rating, or determine rating on the basis of incomplete
information or analyses.
49.4. The regulation on the activities to assess the capacity to obtain a loan shall
be established by the Commission.
Article 50. Other regulated activities
50.1. Other activities specified in law and determined by the Commission as
regulated activities shall apply to regulated activities.
Article 51. Combining several regulated activities
51.1.The following persons may combine The following activities respectively:
51.1. Authorized person, who conducts broker’s activity, dealer’s and
underwriter’s activity;
51.2. Authorized person, who conducts securities depository activities, securities
trading clearing or payment activities;
51.3. Authorized person, who conducts securities trading organization activities,
securities clearing activities;
51.4. activities permitted by the Commission from time to time.
51.2. In the event, single legal entity conducts several of activities specified in this Law,
requirements for each activities shall be the combination of all the requirements for each
activities.
Sub-chapter seven
Accounting and auditing
Article 52. Bookkeeping of accounting
52.1. The Regulated person is obliged to keep record of basic accounting which
fully reflects the transactions concluded in relation to the activities with special license,
and movement and change of its own and customer’s asset, and to prepare correct
balance sheet, and cash flow statement in its time.
42

52.2. The documents and records specified in this Article shall be kept with the
organization for not less than 5 years and after transferred to archive. The Commission
and person appointed by it have a right to examine those documents and records and
obtain the copy of thereof.
Article 53. Auditor
53.1. The Regulated person shall select the auditor who have been issued a right
from the Commission, and conclude agreement within one month after obtaining issued
of the special license, and inform the Commission.
53.2. It is prohibited to appoint the following person as auditor specified in Article
53.1 of this Law:
53.2.1. director, expert, employee, shareholder and customer, who were
being employed or currently being employed by regulated persons;
53.2.2. related person with the person specified in Article 53.2.1 of this
Law;
53.2.3. auditor who have not gotten a right from the Commission.
53.3. Regulated person shall inform the Commission in written of the full name,
address, and location of the auditor within 7 days after the concluding of an agreement
with him.
53.4. Regulated person shall inform the Commission of dismissal of its auditor, or
termination of its agreement with the auditor in written after 7 days thereof.
Article 54. Audit inspection
54.1. Regulated person shall have auditing inspection conducted on its
accounting and other registration after the end of financial year, and submit the copy of
its balance sheet with the audit opinion to the Commission within 25th
of February of the
following year.
54.2. Auditor shall immedietly inform the Commission and regulated person in
written within 5 business days in the event circumstances which might seriously affect
the financial condition of regulated persons, or which violates the other financial
regulation during the process of audit inspection.
54.3. If deems necessary, the Commission may demand to have audit inspection
conducted on quarterly balance sheet.
43

CHAPTER FOUR
Securities market information
Sub-chapter eight
Securities market information
Article 55. Securities primary market information
55.1. The securities issuer of the primary market is obliged to provide free of charge to
an interested persons with the following information:
55.1.1. information reflected in the securities prospectus;
55.1.2. regulation on the issuance and selling of securities, reflected in the
regulation and rules of the securities issuer company;
55.1.3. financial balance sheet;
55.1.4. information defined by the Commission, stock exchange and other
competent authorities and those specified in the regulation and rules of the securities
issuer to be disclosed for public.
Article 56. Securities secondary market information
56.1. During the period when securities of a securities issuer are traded on the
securities secondary market the above noted securities issuer shall inform the
Commission, the stock exchange and the public about the changes which may affect
the shareholders interest.
56.2. The Information [about the changes] specified in Article 56.1 of this Law shall
include the following information:
56.2.1. changes made in the structure of the management [management of
company includes shareholder meeting, board of directors and executive director6
] of a
securities issuer;
56.2.2. changes in the structure of the shareholders who holds 10 percent or
more of the voting shares;
56.2.3. re-organization7
of a securities issuer, changes in its controlled,
subsidiary8
and twin9
company;
6
see the Company Law, Article 60 - 80
7
see the Company Law, Article 18
8
see the Company Law, Article 6
9
Not defined term in the Company Law
44

56.2.4. information regarding the sealing and confiscation of assets of a
securities issuer ;
56.2.5. information regarding a securities issuer’s acquisition of any newly issued
license/special permission and suspension and termination of a license of a securities
issuer;
56.2.6. decision of the securities issuer’s shareholders meeting;
56.2.7. changes in the investments in other legal entity which holds 10 percent or
more of a securities issuer;
56.2.8. other information that might affect the share price.
56.3. A securities issuer shall inform the Commission, stock exchange and the public
through means of a press and media about the information specified in Article 56.2 of
this Law within 10 days from the occurrence of such events.
Article 57. Regulated persons information
57.1. A legal entity with a special license to conduct regulated activity is obliged
to inform the relevant person with the following information:
57.1.1. to provide information that affects a customer’s interest for the
foregoing customer in accordance with the agreement concluded with a
customer;
57.1.2. to disclose an information, which is in its possession, about
securities and securities issuer other than information those are confidential
information during the process of receiving securities subscription;
57.1.3. to provide information regarding restrictions on issued securities
and a securities issuer and special condition of such securities for the customer;
57.1.4. to explain the grounds for the failure or refusal to implement a
customer’s subscription by regulated persons;
57.1.5. about securities transactions which shall be informed to the
Commission under legislation, or about the customer who has concluded the
foregoing transaction or a decision to settle the foregoing transaction;
57.1.6. to deliver information which is received by regulated persons in
order to deliver such information the customer;
45

57.1.7. to provide information about regulated persons organization to a
customer in accordance with the procedures adopted by the Commission;
57.1.8. to inform the Commission about amendments made in the rules
and regulations of its organization in accordance with the proscribed procedures.
Article 58. Information of the securities trading organization
58.1. The stock exchange is obliged to provide all the information about the
securities which the stock exchange has registered and an issuer of such securities
except for confidential information for any party which is interested to see that
information.
58.2. The stock exchange shall inform the public about information specified in
Article 58.1 of this Law through its own public media or other available press and media
which satisfies the requirements determined by the Commission.
58.3. The stock exchange shall establish detailed procedures to deliver the
information specified in Article 58.1 of this Law to the public or its own members by the
stock exchange’s internal regulation.
Article 59. Investor’s information
59.1. The investor is obliged to inform the securities registrar or the trustee
[securities certified manager] about changes related to securities under its/his/her
ownership in accordance with the established procedures.
59.2. The securities certified manager [trustee] shall not be liable for any
loss/damage to the trustee or any other person which arose from the failure to deliver
information in accordance with the relevant procedures by the investor who have
concluded the trust agreement [certified management agreement].
59.3. If the Commission deems it necessary, the Commission is entitled to
demand information about securities which is in the ownership of the investor or about
the relevant person10
of the investor during an inspection.
Article 60. the Commission’s information
60.1. The Commission shall publicize the following information within its rights
and obligations:
60.1.1. about the securities prospectus11
;
10
see Article 4.1.34 of this Law
11
see Article 9 of this Law
46

60.1.2. explanations, reports and conclusions submitted from a securities
issuer to the Commission;
60.1.3. about the decision to issue, suspend or revoke a special license or
right and the grounds to issue the foregoing decision;
60.1.4. annual activity report of the Commission.
60.2. Relations concerning the delivery of information to a foreign regulatory
organization or international organization by the Commission shall be in accordance
with Article 9 of this Law.
Article 61. Receiving information from others by the Commission
61.1. In order to promptly and immediately implement the functions of the
Commission, the Commission is entitled to demand information which is deemed
necessary information from citizens and legal entity.
61.2. The information specified in Article 61.1 of this Law shall be recognized as
confidential information and the Commission shall use the foregoing information only for
its official use and shall not disclose the foregoing information to others without the
permission from the owner of confidential information.
CHAPTER FIVE
SECURITIES MARKET REGULATION
Sub-chapter nine
The State Regulation in the Securities Market
Article 62. The state central administrative organization in charge of
matters related to securities market
62.1. The state central administrative organization in charge of matters related
to securities market shall exercise the following rights and obligations on securities
activities:
62.1.1. to prepare proposals on the improvement of securities legislation;
62.1.2. to determine the state policy on securities market in coordination
with integrated financial and economic policy and to provide recommendation
about such policy to the Government;
47

62.1.3. to cooperate with the Commission and to support the activities of
the Commission;
62.1.4. to issue Government bonds and to establish the standard price of
the Government bond on the securities market;
62.1.5. to issue guarantees for the bonds issued by the Government and
the Governors of aimag and capital city;
62.1.6. other functions specified in legislation.
Article 63. Organization that implements the state regulation in the
securities market
63.1. The Commission shall exercise the power of oversight and regulate the
securities market.
63.2. Any securities participant12
shall implement the decision approved by the
Commission in order to implement legislation.
63.3. The status of the Commission shall be regulated by the Law on Status of
the Commission and this Law.
Article 64. Purpose of the State regulation
6.1. The regulation in the securities market as implemented by the State within
the scope of this Law shall have the following purposes:
64.1.1. to promote and support fair, efficient, competitive, transparent and
well-ordered conditions in the securities sector;
64.1.2. to improve the citizens education on the securities market, and
promote activities directed for this purpose;
64.1.3. to protect the rights and legitimate interests of the investors at
appropriate level in accordance with general principle that the investor is
responsible for his/her/its own investment decision;
64.1.4. to take measures to reduce crimes and violations in the securities
market;
64.1.5. to mitigate the system risk of the securities market.
Article 65. Powers of the Commission
12
see, Article 4.1.10 of this Law
48

65.1. The Commission shall have the following powers:
65.1.1. to take necessary measures to ensure the implementation of this
Law and other legislation approved in conformity of this Law and to approve
regulations, rules and norms that are necessary for implementation of the state
regulation of the securities market;
65.1.2. to determine the State’s priority direction which shall be used for
the development of the securities market and to take measures to establish fair,
efficient, competitive, transparent and well-ordered conditions in the securities
market;
65.1.3. to determine conditions and requirements for the applicants for
special license/permission and to approve detailed regulation regarding
issuance, suspension and revocation of special license/permission;
65.1.4. to define the criteria for regulated persons, to approve regulation
and rules which shall be applicable for regulated persons and to approve
methodology to calculate the satisfaction of criteria on regulated persons;
65.1.5. to approve the conditions and requirements for an agreement
which related to securities and which concluded between regulated persons and
an customer and to enact the regulation for assessment and reporting of
performance of obligation under the foregoing agreement;
65.1.6. to regulate, overview and inspect activities of regulated persons, to
take measures to remove any violation, to give the task and to impose the
responsibility to regulated persons;
65.1.7. to determine whether governing persons of regulated persons is
an eligible person, to give permission to work as a governing person and to take
measures to discharge a person who is not an eligible person from a position as
a governing person of regulated persons;
65.1.8. to register securities of a domestic and foreign legal entity for
public offering and trading in the territory of Mongolia, to give permission to start
the public offering or to start trading in the securities primary and secondary
market, to suspend and cease trading activity of certain securities and to remove
the registration of securities;
65.1.9.to determine conditions and requirements for a securities issuer
and to enact the regulation regarding activities specified in Article 65.1.8 of this
Law;
49

65.1.10. to register securities which are to be traded in the territory of
Mongolia and regulated persons which would undertake activities in the
securities market;
65.1.11. to choose and approve the means of press and media for
published and to determine conditions and requirements for the activities of the
press and media organization that have chosen and approved;
65.1.12. to enact the rules and regulations which shall be applicable for
activities of the self-regulatory organization13
, the securities trade organization,
the securities trade clearing organization14
, the securities trade payment clearing
organization15
and the securities depository organization16
, and to enact the
regulation regarding reporting from the foregoing organizations to the
Commission and the public;
65.1.13. to regulate activities of cooperate investment;
65.1.14. to issue permission to auditing, assessment and legal companies
which will provide services in the securities market;
65.1.15. to regulate activities with respect to making a proposal to
voluntarily and mandatory purchase all shares of company;
65.1.16. to protect the rights and legitimate interests of a customer at
appropriate level in accordance with general principle that a customer is
responsible for his/her/its own investment decision;
65.1.17. to improve public education and information regarding the risk,
benefit and responsibilities of the securities investment and the securities market;
65.1.18. to take measures directed at suppressing the illegal, unethical
and inequitable activities of the securities market;
65.1.19. if the Commission deems it necessary, to make a claim on behalf
of a securities holder with or without a power of attorney for the legal interest of a
securities holder and participate in a court hearing;
65.1.20. to cooperate with authorized regulatory organization of foreign
countries and international organizations, and to provide mutual assistance which
is beneficial to each party;
65.1.21. other functions determined by a law
13
see Article 72 of this Law
14
15
16
50

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