1.1 The present Rules on the Georgian Stock Exchange shareholder
members (hereinafter referred to as Rules) has been elaborated in accordance
with the Georgian legislation on Securities, the Georgian Stock Exchange
(further referred to as Exchange) and other regulatory rules.
1.2 The present Rules define rules and procedures for admission to market
shareholder membership (hereinafter referred as to Member), requirements set
forth for Exchange members, admission to trading, regulations for suspension of
participation in the trading and termination of membership as well as the issues
relating to conditional shareholder members (hereinafter referred as to
Conditional Member).
1.3 All the appendices to the Rule are its integral part.
1.4 Amendments to the Rule are made by the decision of the Exchange Supervisory
Board.
2. PROCEDURE FOR ADMISSION TO MEMBERSHIP
2.1. Any brokerage company meeting the requirements of the
Georgian legislation, Exchange Charter and the present Rule may become a Member
of the Exchange.
2.2. Brokerage company applying for membership shall conclude an agreement with
a seller to purchase the Exchange shares.
2.3. In case the applicant does not possess a brokerage company license, it
shall:
2.3.1 Submit an application for obtaining a brokerage company license to
National Securities Commission of Georgia (hereinafter referred as to
Commission) within 30 days upon the submission to the Exchange of a copy of the
agreement under Article 2.2 of the present Rules, and of an order on
re-registration of shares in the Exchange share register by the seller.
2.3.2 Upon submission of the application to the Commission the applicant becomes
a provisional member of the Exchange.
2.3.3 Within one business day, after the expiration of terms set forth in the
Article 2.3.1 of these Rules, submit a copy of the registered application to the
Exchange. In case of violation of the terms the applicant loses a provisional
member status.
2.3.4 In case of refusal of the Commission to issue the license to the
provisional member, the latter is deprived of the provisional member status and
is denied a membership, while the share re-registration order in the Exchange
register shall be considered invalid.
2.3.5 In case of non-submission of the license or of a copy of the decision to
the Exchange managing body by the applicant within 15 days upon the Commission's
final decision on issuance of a provisional member license, the applicant is
deprived of the provisional member status and denied the membership, while the
share re-registration order in the Exchange register shall be considered
invalid.
2.4 An application (appendix 1) submitted by an applicant Brokerage Company in
the name of the Exchange General Director shall serve as a basis for reviewing
the membership issue. A list of the documents given in appendix 2 should be
attached to the application.
2.5 In case the applicant does not present all necessary documents, the
application shall not be reviewed.
2.6 The applicant is responsible for the accuracy of the documents submitted.
2.7 The application along with the attached documents shall be submitted to the
Director of Admission to Trading within 1 business day, who within 1 business
day will submit them to the Exchange Members and Brokers Service for
reviewing.
2.8 Exchange Members and Brokers Service shall review the documents within 5
days upon submission.
2.9 Exchange Members and Brokers Service may, in case of necessity, request an
additional information relating to the documents submitted.
2.10 In the case of the submission of additional information for the
verification of documents, the terms stipulated in Article 2.8 shall be
restarted upon the submission of additional information.
2.11 After the documents have been reviewed by Exchange Members and Brokers
Service, the Director of Admission to Trading makes an opinion, which the
General Director presents to the Supervisory Board for approval on the nearest
meeting.
2.12 In case the applicant does not agree with the Exchange Members and Brokers
Service's actions, it may appeal to the Exchange Supervisory Board.
2.13 The decision on admission to membership is made by the Exchange Supervisory
Board and the notification is sent within 1 business day to the applicant.
2.14 Within 1 business day upon the decision on admission to membership a
respective change is entered in the Exchange share register and a provisional
member acquires Exchange Member status.
2.15 A date when all respective changes are entered into the Exchange share
register shall be considered the date of admission to membership.
2.16 After relevant changes in the Exchange share register, the agreement is
concluded between the member and the Exchange (appendix #3).
2.17 Exchange Supervisory Board decision shall be made known to all the Exchange
members and notification of it is sent to the Commission within one business
day, since the decision is taken.
3. EXCHANGE MEMBER RIGHTS AND OBLIGATIONS
3.1 Exchange members have the following rights:
3.1.1 Participate in Exchange organized share trading in accordance with the
established rules and utilize the services rendered by the Exchange Services;
3.1.2 Be informed on the main results of the Exchange economic and financial
activities;
3.1.3 Be informed on record-keeping and monitoring on the Exchange, according to
the established rules;
3.1.4 Appeal to the Permanent Arbitration of the Exchange for the conflict
resolution;
3.1.5 Enjoy all rights of shareholders, according to the Georgian legislation;
3.1.6 In case of violation of the Exchange regulatory rules by a Member or by an
employee of the Exchange address the issue to the General Director of the
Exchange;
3.1.7 Appeal the Supervisory Board regarding the decision made by the Directors
of the Exchange, which offends Member's rights;
3.2 Main Obligations of Exchange Members:
3.2.1 Sign a convention to join owner-members joint liabilities, meet the
Charter and other regulatory requirements and implement decisions of the
Exchange managing bodies;
3.2.2 Ensure the compliance with norms of the Ethics Code approved by the
Exchange owner-members general meeting;
3.2.3 Maintain technical, technological and commercial confidentiality,
disclosure of which may harm the Exchange, its members and clients;
3.2.4 Make timely payments of Exchange membership fees and other dues;
3.2.5 Promote the achievement of the Exchange Charter goals, protect its
interests, and help to boost its reputation and prestige;
3.2.6 Duly inform the Exchange managing body on any changes in their
financial or legal status, which may affect the responsibilities towards the
Exchange, its members and clients;
3.2.7 Possess respective license for broker activities;
3.2.8 Own no more than 10% of the Exchange shares directly or via related
persons;
3.2.9 Immediately after receiving a license on any activity, permitted by the
Georgian legislation, inform the management of the Exchange about it;
3.2.10 Give the Exchange a written consent on inspection of its records and
books, aimed to verify received information;
3.2.11 Meet the requirements set by the Commission regulatory rules, including
requirements pertaining to the company's capital;
3.2.12 Be a member of the Central Depository.
4. INFORMATION TO BE FURNISHED TO THE EXCHANGE
4.1 A member shall furnish to the Exchange financial reports in
the form and within the terms established by the Commission.
4.2 Exchange Members and Brokers Service has the right to require from an
Exchange member any additional information to verify information delivered under
the provision of 4.1. Paragraph;
4.3 In the event of requesting additional information, within 10 business days
of receiving such notice, a member shall provide the Exchange with the requested
information. If the time set is not sufficient for the delivery of such
information, a member shall submit to the Exchange explanatory notice indicating
the reasons for the delay and the term may be extended for 5 business
days.
5. ADMISSION OF A MEMBER TO THE TRADING SYSTEM AND SUSPENSION OF PARTICIPATION IN THE TRADES
5.1 The Exchange members shall be admitted to the trading system
only after complying with the following requirements:
5.1.1 Make payments of all fees and charges set by the Exchange;
5.1.2 Receive broker authorization for access to the trading system.
5.2 A member shall submit to the General Director of the Exchange an application
for each broker's authorization, signed by the chairman of a member organization
(Appendix No2). Attached should be the copies of the brokers' license and the
qualification certificate of admission to the trading system.
5.3 Supervisory Board of the exchange sets the procedure for obtaining the
qualification certificate.
5.4 The Exchange may request the broker to reset the qualification procedure,
if:
5.4.1 There is a justified claim of a customer against a broker;
5.4.2 There are substantial changes made to the securities regulatory
legislation and to its normative acts;
5.4.3 There are changes made to the trading system;
5.5 The General Director shall be authorized to temporarily suspend the member's
right to participate in trading if the following occurs:
5.5.1 Suspension for three months - if any of the following violation occurs:
5.5.1.1 Failure to comply with the obligations under the quotations entered into
the trading system;
5.5.1.2 Non-timely payment of fees;
5.5.1.3 Delivery of the information specified in Articles 4.1 and 4.3. to the
Members and Brokers Service in a non-complete or inaccurate form, or failure to
submit such information.
5.5.1 Suspension of the brokerage company license to a member by a Commission;
5.5.2 Failure to comply the obligations specified in Article 3.2.
5.6 Temporary suspension to the member's right to participate in trading does
not relieve such a member from the payments specified in Articles 7.1 and
7.2.
5.7 In case of the temporary suspension as indicated above, the Exchange shall
notify its members of such suspension on the same day and forward a written
notification to the Commission.
5.8 If the violations specified in Article 5.5. are remedied, the members shall
be admitted to the trading system again by the decision of the General Director
of the Exchange, according to rules of the Code of Procedure.
5.9 If the member's right to participate in trading is renewed, the Exchange
shall notify its members of such renewal the same day and forward a notification
to the Commission.
5.10 If a member repeatedly violates the requirements of the Law, or does not
remedies such violations specified in Article 5.5.1 during the period of
suspension from the trading, the General Director shall be authorized to suspend
the right of a member to participate in trading based on the Disciplinary Code,
until the decision is taken by the General Meeting. This action shall be carried
out whether he remedies the violations or not, due to which he was repeatedly
suspended the right to participate in the trades.
6.1 Membership shall be terminated for the following reasons:
6.1.1 Application of a member on the withdrawal from membership;
6.1.2 Bankruptcy of a member under the Georgian legislation;
6.1.3 Liquidation of a member as a legal entity;
6.1.4 Revocation of a brokerage company license to a member by a Commission;
6.1.5 Disposal of all Exchange Shares under such member's ownership;
6.1.6 Failure to comply the decision of the Permanent Arbitration of the
Exchange by the member;
6.1.7 Delivery of false information to the Exchange by the member;
6.1.8 Non-compliance by the member, to allow the Exchange to check books and
records of such member;
6.1.9 Repeated violation of regulatory rules of the Exchange by the member or
failure to remedy such violations within the due period of time.
6.2 In the event specified in Article 6.1.1., such member delivers application
to the Exchange, on the name of the General Director;
6.3 In the event specified in Articles 6.1.2. - 6.1.6., according to the Article
3.2.6., the member shall notify the members and brokers of the Exchange about
the occurred fact.
6.4 After the necessary information is delivered to the Exchange from the
members and brokers of the Exchange, the Director of the Admission to Trading
makes opinion, which together with the opinion of the General Director of the
Exchange is presented to the Supervisory Board of the Exchange for approval, in
the nearest oncoming meeting.
6.5 In the event specifies in Articles 6.1.1-6.1.8. on the dismissal of a member
from the Exchange, the decision is made by the Supervisory Board of the
Exchange.
6.6 In the event specified in Article 6.1.9., the Supervisory Board may raise an
issue at the General Meeting of the members on dismissing such member from the
Exchange and terminate its right to participate in trades until the General
Meeting decides otherwise.
6.7 In the event specified in Article 6.6., after the issue is presented for
consideration by the Supervisory Board to the General Meeting of the members on
the dismissal of a member from the Exchange, the final decision is made by the
General Meeting of the members.
6.8 In case of the Termination of membership, the Exchange shall notify in
written form the members and the Commission, on the same day.
6.9 In case of termination of the membership, the Exchange shall publish the
official information within one business day.
6.10 The day of the termination of membership is the day on which the decision
is made by the Supervisory Board or the General Meeting, with consideration
that, the transfer of ownership is made according to the conditions of Article
6.12.
6.11 After the decision of dismissal of member is made, such member is
prohibited to participate in trading of the trading system.
6.12 In case of dismissal of a brokerage company from the Exchange, the
membership right shall be sold to another brokerage company. Money obtained,
less the amount required to cover the liabilities to the customers and the
Exchange, shall be returned to the dismissed brokerage company.
6.13 No later than within 30 days upon the termination of his brokerage
company's activity, a member shall sell his membership right to another entity
authorized to become the Exchange member. If a brokerage company is unable to
sell his membership right within the indicated period, he shall refer to the
Exchange, which shall help him in the sale of such right at the market price
relevant for this period.
6.14 A member may appeal to the court to try the fairness of General Meeting's
or supervisory Board's decision regarding the termination of membership.
7.1 Certain fees are established for the Exchange members, used
for the defrayal of the trading system service expenses and for further
development of the Exchange. (Appendix No4).
7.2 The Supervisory Board shall determine the amount of fees and the periodicity
of payments.
(Printed on the applicant's letterhead)
To the General Director of the Georgian
Stock Exchange
____________________________________
(name of the organization)
____________________________________
(officer's name)
APPLICATION
Please, review our application and recommend to the Supervisory Board on the admission to the Georgian Stock Exchange as a member.
The Application is attached by the following documents:
1. Copy of the Charter certified by notary, considering all
changes made for the moment of submission;
2. Copy of the registration certificate (of court decision) certified by a
notary, considering all the changes made for the moment of submission;
3. The copy of the License of the Brokerage Company;
4. The list of the persons, who are authorized to carry out operations in the
trading system;
5. Copies of the licenses issued by the Securities Commission to the brokers;
6. The financial statement of last year presented in the established form,
audited by the independent Auditor.
Signature: ___________________________
Date: ___________________________
Seal
(Printed on the applicant's letterhead)
To the General Director of the Georgian Stock Exchange
We present the list of the persons, who are authorized to participate in securities operations on behalf of the above stated member of the Georgian Stock Exchange on the trading system:
1._______________________________ Contact
Telephones:___________________
(name, surname)
2._______________________________
Contact Telephones:___________________
(name, surname)
3._______________________________
Contact Telephones:___________________
(name, surname)
4.
_______________________________ Contact Telephones:___________________
(name, surname)
We are obliged to inform the Exchange about changes regarding the replacement of the authorized persons.
________________________________ (head of the brokerage company)
Signature: ______________________
Seal
AGREEMENT
ON CONDUCTING SECURITIES OPERATIONS ON THE GEORGIAN STOCK EXCHANE
Tbilisi"____" "_________"2000
The JSC Georgian Stock Exchange (hereinafter referred as to
Exchange), represented by its General Director, Vakhtang Svanadze, who acts
based on the Exchange Charter, from one side and
_____________________________________________
____________________________________ (The Exchange member)
(Hereinafter referred as to Exchange Member), represented by
________________________
who acts based on________________________, from the other side, conclude the
agreement on the following:
1.1 Admission of the Exchange Member to the Exchange Trading System and provision of relevant services.
The Exchange is liable to:
2.1.1 Within 3 days from the signing of this agreement, provide access of the
Member to the Trading System, without any impediments and according to this
agreement.
2.1.2 Provide equal working conditions in the trading system for all members;
2.1.3 Provide the Exchange Member with the Exchange normative documents in forth
and keep it informed of any amendments to these documents;
2.1.4 Perform procedures of the securities admission to the trading system under
the applicable legislation;
2.1.5 Carry out control of compliance of members with trading rules;
2.1.6 Support and encourage the improvement of qualification of the members,
brokers and employees.
2.2 The Exchange Member is liable to:
2.2.1 Sign the Convention according to which it will share liabilities of all
member-shareholders - to follow provisions of the Charter, Bylaws and trading
rules and fulfill decisions made by the Exchange managing bodies;
2.2.2 Ensure compliance with norms of Ethics Code approved by the General
Meeting of Member-shareholders;
2.2.3 Make a due payment of any membership, commission and other fees set by the
Exchange;
2.2.4 Support achievement of Charter objectives of the Exchange, protect its
interests and help to boost its reputation and prestige;
2.2.5 Duly inform the Exchange managing body on any current and pending changes
in its financial and legal status, which may affect the fulfillment of its
obligations towards the Exchange, other members or clients;
2.2.6 Hold an appropriate license for brokerage activities;
2.2.7 Not to hold more than 10% of the Exchange shares directly or through
associated persons;
2.2.8 Immediately communicate with the Exchange information upon receipt of the
license on any activities permitted by the Georgian Legislation;
2.2.9 Give the Exchange the written consent to check its books and records to
ensure accuracy of any provided information;
2.2.10 Meet the requirements set by the Commission regulatory rules, including
requirements pertaining to the company's capital.
2.3 Broker of the Exchange Member is liable to:
2.3.1 Conclude the securities buy and sell transactions in compliance with the
Exchange normative documents and Georgian legislation;
2.3.2 Execute transactions through the typical agreement, where major terms and
conditions of transaction, inter-settlement rules as well as amount of
commission fees should be set forth;
2.3.3 Register and record any transaction concluded on the Exchange.
3.1 The Exchange is authorized to:
3.1.1 For violation of the current legislation and Exchange regulations by the
Exchange Member or its broker:
3.1.1.1 Suspend participation of the Member from trading;
3.1.1.2 Require the Exchange Member to replace the broker with any other person
under established rules;
3.1.1.3 Suspend membership of such a member.
3.2 An Exchange Member has right to:
3.2.1 Participate in securities trading organized by the Exchange;
3.2.2 Use any type of services provided by the Exchange;
3.2.3 Be informed on main results of the Exchange economic activities;
3.2.4 Be provided with the information on the Exchange records and control
conditions;
3.2.5 Address to the Permanent Arbitration for dispute resolutions;
3.2.6 Enjoy all shareholder rights, provided by the Georgian legislation;
3.2.7 Address to the General Director of the Exchange, if the violation of the
regulation rules of the Exchange occurs by a Member or employees of the
Exchange;
3.2.8 Appeal the Supervisory Board regarding such a decision of the Directors of
the Exchange, which offends shareholder's rights;
3.3 Brokers of the Exchange member are not authorized to:
3.3.1 Accept orders and instructions contradictory to the Exchange trading rules
and Georgian legislation;
3.3.2 Mislead other members, administration or its clients by providing
inaccurate or unverified information to them.
4.1. In the events specified in Articles 7.1. -7.2. of the
"Bylaws of Shareholder -Members of the Georgian Stock Exchange", if a
member fails to pay fees in due time or fails to pay full amount of prescribed
fee, such member shall pay fine equal to 0.1% of the unpaid sum, for each
overdue day.
4.2. Members of the Exchange and its broker(s) shall fully comply with the
obligations undertaken according to Article 2.2. and 2.3 of this agreement.
4.3. In case violations of this agreement or rules of the Exchange or current
Georgian legislation by a member or its broker(s) occurs, relevant sanction
shall be imposed upon them.
4.4. In case the Exchange fails to comply with the conditions specified in
Article 2.1.1. of this agreement, the Exchange shall pay the fine to a member
equal to 0.1% of the initial exchange service fee, for each overdue day.
4.5. In case of inappropriate actions of the Exchange effecting a Member, the
Exchange shall redeem losses of such a Member, according to the Georgian
Legislation.
5. FORM OF INFORMATION SUBMISSION
5.1. Parties shall submit any information to each other in
written form.
5.2. The form of submission of information shall be changed on the basis of
agreement between the Parties.
6.1. All disputes, raised while executing this Agreement, shall
be settled through the verbal agreement between the Parties or by setting
certain requirements.
6.1. In the event that the Parties fail to achieve dispute settlement through
the agreement between them, then the Parties may address to the Permanent
Arbitration created by the Exchange.
6.1. In the event that the agreement is not achieved between the Parties, all
the disputable issues shall be reviewed in accordance with the Georgian
legislation.
7.1. The Parties are liable to maintain confidentiality of information provided to each other within the Agreement limits. Information shall be considered confidential which is not available to public (i.e. not provided by the media, periodical reports and published information) and use of which may affect material or moral interests for any of the Parties.
8.1. Either party shall not bear the responsibility on obligations if non-fulfillment is caused by the Force-Majeur. The liability on obligation shall be postponed until the Force-Majeur is eliminated.
9. TERM OF AGREEMENT AND RULES OF AMENDMENT
9.1. This Agreement shall be put into effect upon it is signed
and valid until _______, 2000.
9.2. If none of the Parties give 20-days prior notice to the other party on
termination of this Agreement prior to its expiration, then the term of the
Agreement shall be deemed extended for 12 calendar months.
9.3. Any Party may terminate the term of this Agreement prior to its expiration.
A party shall give 15-days prior notice in written form to the other party on
termination of the term of this Agreement. The document shall be signed by an
authorized person and sealed.
9.4. This Agreement is executed in two identical copies, one of which is to be
kept by the Exchange and the other one - by the Exchange member.
9.5. Any amendment to this Agreement shall be deemed valid if executed in
written form, signed and certified by a seal by both parties.
Exchange Member of the Exchange
The
Georgian Stock Exchange ____________________
Address: 74-a I. Chavchavadze Ave. ____________________
Tbilisi, 380062
Tel: (995 32) 25 22 73/78/79/80 ____________________
Fax: (995 32) 25 12
77
____________________
Bank Account: TBC Bank, Acc. # 15467935 ____________________
General
Director ____________________
___________/V. Svanadze/ ____________________