November 3, 2021

News in the world of securities market

There have been some changes in the legislation on the securities market. In particular, by the Law of 29.10.2021, the following amendments were made to the laws “On the Securities Market” and “On Joint Stock Companies and Protection of Shareholders’ Rights”:

The Law “On the Securities Market”

  • Has been supplemented with new concepts:

Exchange bond – a debt issue security issued by JSC, the issue of which is registered by the stock exchange, included in the stock exchange quotation list of the stock exchange.

A foreign nominee holder – a foreign organization that is an international centralized system of accounting for rights to securities and (or) securities settlements. Or it can be a central depository that performs settlements on securities based on the results of trading on foreign exchanges or other regulated markets.

  • The procedure for the issue, placement and circulation of exchange-traded bonds has been determined.

In detail, the issue is carried out without state registration, in accordance with the procedure established by the stock exchange in agreement with the authorized state body. Placement and circulation are carried out on stock exchanges with a maturity of no more than one year. At the same time, the placement is carried out only through the stock exchange that has registered the issue of exchange-traded bonds.

  • In accordance with the amendments introduced, a foreign nominee holder, along with an investment intermediary, is authorized to record the rights to securities. The custody accounts of foreign nominee holders, as well as investment intermediaries, are attributed to the exclusive functions of the Central Securities Depository.
  • In addition, in accordance with the amendments, the rights of the Central Securities Depository are defined. It can:

– open accounts to a foreign nominee holder to account for the rights to securities issued by residents of Uzbekistan and traded outside the territory of the republic;

– receive, under an agreement with the issuer, funds intended for the payment of income (dividends) and repayment of the value of securities, as well as make appropriate payments;

– when performing the functions of maintaining registers of securities holders, the right to receive from investment intermediaries and foreign nominee holders the information necessary for the formation of these registers.

  • In addition, the powers of the investment consultant have increased. In particular, now such a consultant is also entitled to provide the services of a transfer agent, without the right to carry out the professional activity of an investment intermediary.

The Law “On Joint-Stock Companies and Protection of Shareholders’ Rights”

According to the amendments, now a joint-stock company has the right:

– to place preferred shares, the nominal value of which does not exceed 25% of their authorized capital (authorized capital);

– to pay dividends through the Central Depository and (or) investment intermediaries in accordance with the concluded agreement.

In addition, now the general meeting of shareholders can be held remotely using information and communication technologies.