APPROVED

by decision of the Board of

the JSC ‘Toshkent’ Republican Stock Exchange

No. _____ dated ‘___’ _____________2015

REGULATIONS ON

QUALIFICATION AND CERTIFICATION COMMITTEE OF

THE JSC ‘TOSHKENT’ REPUBLICAN STOCK EXCHANGE

                                                                               (redraft)

Preamble

1. I. General Provisions
2. Composition and Functions of the Qualification and Certification Committee

III. Procedure for Submission of Documents When Training the Employees of Members of the Stock Exchange for Work in the Trading System of the JSC ‘Toshkent’ Republican Stock Exchange

1. Procedure for Submission of Documents for Certification of the Employees of Members of the Stock Exchange
2. Qualification and Certification Committee’s Rules of Procedure
3. Procedure for Recertification of the Employees of Members of the Stock Exchange

VII. Organizing Supplementary Certification of the Employees of Members of the Stock Exchange

VIII. Final Provisions

            Annexes (##1-8)

Tashkent - 2010

These Regulations are developed in accordance with Laws of the Republic of Uzbekistan ‘On Exchanges and Exchange Activities’ (amended) approved by Law of the Republic of Uzbekistan No.ZRU-375 dated 12 September 2014 (Collected legislation of the Republic of Uzbekistan, 2014 No.38, Art. 481), ‘On the Securities Market’ No.ZRU-163 dated 22 July 2008 (Collected legislation of the Republic of Uzbekistan, 2008 No.29-30, Art. 278), ‘Rules of Exchange Trading in Securities at the JSC ‘Toshkent’ Republican Stock Exchange (amended), other legislative instruments and rules, regulating the securities market activity and conducting operations on the JSC ‘Toshkent’ Republican Stock Exchange (hereafter – the ‘Stock Exchange’), and determines the procedure for the Qualification and Certification Committee of the Stock Exchange for certifying and recertifying of traders to permit them to participate in stock trading.  

1. General Provisions

            1. These Regulation shall apply the terms and definitions of ‘The Rules of Exchange Trading in Securities at the JSC ‘Toshkent’ Republican Stock Exchange (hereinafter - the ‘Rules’), as well as the following terms:

‘trader’s automated work place (AWP)’ means a set of software and hardware located in the trading floor of the JSC ‘Toshkent’ Republican Stock Exchange and used by traders for technical access to the Stock Exchange’s Trading System;

‘Stock Exchange’ refers to the JSC ‘Toshkent’ Republican Stock Exchange;

                ‘broker’ means a legal entity acting on the basis of a commission or agency agreement, or a power of attorney to conduct securities transactions as a commission agent or attorney of a customer;

‘trader’ means an employee of the member of the Stock Exchange who has a qualification certificate of a specialist in the securities market admitted by the Exchange to stock trading in accordance with the established procedure and authorized to conclude exchange transactions on the member’s behalf;

‘Qualification and Certification Committee’ (hereinafter - the ‘Committee’) refers to an independent unit of the Stock Exchange established in accordance with the legislation on exchange activities with the purpose of determining the qualifications of traders of the Stock Exchange members and permitting them to participate in stock trading;

‘Rules’ refers to ‘The Rules of Exchange Trading in Securities at the JSC “Toshkent” Republican Stock Exchange’;

‘Software and Technical Unit’ refers to a unit of the Stock Exchange, which functions include monitoring the operation of the Stock Exchange’s Trading System, its technical support, and training of traders;

‘remote access mode’ means stock exchange dealing from the Remote Work Places of a Member of the Stock Exchange;

‘terminal’ means a workplace for making exchange transactions, equipped with computer hardware and communication facilities;

‘Trading System’ refers to a set of electronic computing machines, software, databases, telecommunications facilities, and other equipment that allow maintaining, storing, processing and disclosing information necessary for the conclusion and execution of securities transactions in electronic mode;

‘remote work place’ means the workplace of the Stock Exchange Member located outside the trading floor of the Stock Exchange;

‘training terminal’ means an automated workplace located in the Central Trading Floor and designed for training of traders;

 ‘Central Trading Floor’ means a special room equipped with automated work places, including terminals, located in the central office of the Stock Exchange, designed to making exchange transactions;

 ‘Member of the Stock Exchange’ means a legal entity, which, in accordance with the procedure established by the Stock Exchange, has been entitled to participate in stock trading and make exchange transactions as dealers, market makers, and brokers.

2. Employees of the Stock Exchange Members who seek to gain a trader status, have submitted documents in accordance with the requirement hereof, and meet the requirements of the legislation, shall be allowed to complete certification.
3. Traders are allowed to gain recertification if:

а) the validity of their Certificates of Attestation issued by the Committee is expiring;

1. b) they are referred for recertification by the decision of the Board of the Stock Exchange in case they have violated the Rules;
2. c) the Rules redrafted are to be carried into effect.

1. Composition and Functions of the Committee

4. The Committee is formed to determine the qualifications of the employees of Members of the Stock Exchange, followed by their gaining a trader status with approval to participate in stock trading, enable them to fulfill their obligations as participants in the stock market in good faith, as well as improve their skills in dealing with securities traded on the Stock Exchange.
5. The Committee shall consist of the Chairman of the Committee, members of the Committee and the Secretary of the Committee appointed by the decision of the Board of the Stock Exchange for the current calendar year. The number of members of the Committee is determined by the Board of the Stock Exchange and must be at least five persons.
6. The Committee may include workers of the Stock Exchange units and representatives of the Stock Exchange Members.
7. The functions of the Committee include the following:

            certifying and recertifying the employees of Members of the Stock Exchange through a qualifying examination;

issuance of certificates confirming that an employee of the Stock Exchange Member has gained a trader status with approval to participate in stock trading;

            issuance of certificates to extend the admission of a trader to stock trading;

submitting proposals on amendments and/or additions to the certification procedure to the Board of the Stock Exchange.

8. The Chairman of the Committee will be appointed from among the employees of the Stock Exchange who have higher economic, legal or technical education, as well as at least three years of work experience at the Stock Exchange.
9. If the Chairman of the Committee is absent (dismissed from work, on a business trip of more than 5 working days, on annual leave or on sick leave), his duties shall be temporarily assigned to another member of the Committee.
10. If a member of the Committee is absent (on a business trip of more than 5 working days, on annual leave or on sick leave), other employees of the Stock Exchange may be temporarily included in the composition of the Committee.
11. The functions of the Chairman of the Committee include:

approval of decisions taken by the Committee in the course of carrying out activities;

making recommendations on changes in the composition of the Committee to the Board of the Stock Exchange;

            supervision of eligibility and proper performance of duties by members of the Committee.

2. The Committee shall meet as and when needed. Members of the Committee are notified of the date of a meeting by the Secretary of the Committee.
3. Upon the invitation of the Chairman of the Committee, legal and natural persons (consultants and independent experts) may attend the meetings as observers.
4. A meeting of the Committee is considered duly constituted provided that at least 60% of the list of its members attends the meeting, with the mandatory presence of the Chairman and the Secretary of the Committee.
5. Minutes containing the decision taken with regard to certification (recertification) of each employee of the Stock Exchange Member shall be kept at meetings of the Committee. The minutes are signed by the Chairman and the Secretary of the Committee, as well as by the members of the Committee.
6. Decisions of the Committee shall be taken by a simple majority of votes.
7. Members of the Committee shall be remunerated for their work in the amount determined by the Board of the Stock Exchange.
8. Based on the results of the Committee’s activities for the current calendar year, the Chairman submits a report to the Board of the Stock Exchange within one month after the reporting period.

III. Procedure for Training to Work at a Trader’s AWP

9. To be certified by the Committee, employees of the Member of the Stock Exchange must be trained to work at a trader’s AWP in the Trading System.
10. Employees of Members of the Stock Exchange will be trained free of charge.
11. To have its employees trained, a Member of the Stock submits a standard form application (Annex #1) addressed to the Chairman of the Board and sends it to the administrative office of the Stock Exchange.
12. Upon registration in the administrative office of the Stock Exchange, the application, initialed by the Chairman of the Board (or in his absence, by the Deputy Chairman of the Board), shall be submitted for execution to the unit responsible for work with Members of the Stock Exchange. The above unit will organize training with the involvement of workers of the software and technical unit.
13. Training is conducted at training terminals of the Central Trading Floor of the Stock Exchange or at a dedicated terminal.
14. Based on the training results, the employees of the software and technical unit of the Stock Exchange shall test the readiness of trainees to work in the Stock Exchange’s Trading System and submit of a record of training outcomes signed by the Head of the software and technical unit of the Stock Exchange to the Secretary of the Committee.
15. The Record of Training Outcomes of the employees of the Stock Exchange Member to work in the Stock Exchange’s Trading System, drawn up according to the standard form (Annex #2), should reflect the information on admission or non-admission to work in the Stock Exchange’s Trading System for each trainee.
16. The employees of the Stock Exchange Members who have successfully passed the training will receive a ‘Training Certificate to Work at a Trader’s AWP at the JSC ‘Toshkent’ Republican Stock Exchange’ as per standard form (Annex #3).
17. In case if the employees of the Stock Exchange Member are certified due to introduction of new Rules or re-certification, they will not have to complete training to work at a trader’s automated workplace.

1. Procedure for Submission and Consideration of Documents

for Certification of the Employees of Members of the Stock Exchange

8. Based on the outcomes of training of its employees to work at a trader’s AWP, the Stock Exchange Member submits a standard form application (Annex #4) for certification of the employees to the administrative office of the Stock Exchange with the following documents attached:-

a copy of the qualification certificate of a specialist in the securities market for each employee issued by the authorized government body for regulating the securities market;

a copy of the training certificate to work at a trader’s AWP at the JSC ‘Toshkent’ Republican Stock Exchange.

9. An application initialed by the Chairman of the Board of the Stock Exchange Board or, in case of his absence, by the Deputy Chairman of the Board, shall be submitted for execution to the unit responsible for work with the Stock Exchange Members and further to the Secretary of the Committee.
10. The Secretary of the Committee shall check the documents received to carry out certifying the employees of the Stock Exchange Member and submit them to the Chairman of the Qualification and Certification Committee.
11. The Chairman of the Committee appoints the date of the certification, and the Secretary of the Committee informs those undergoing the certification of the procedure for, date and time of the certification.

1. Committee’s Rules of Procedure for Certifying

2. Attesting to obtain the ‘Certificate for Working in the Trading System of the JSC “Toshkent” Republican Stock Exchange as a Trader’ shall be conducted in the form of an oral examination using question papers.
3. The question papers are developed by the Committee and include questions related to knowledge of the provisions and norms of legislation on the securities market of the Republic of Uzbekistan, the Rules of Exchange Trading in Securities at the JSC ‘Toshkent’ Republican Stock Exchange, internal regulatory documents of the Stock Exchange, and approved by the Board of the Stock Exchange.
4. Certification is carried out in the following main areas:-

- knowledge of laws and statutory instruments regulating the exchange activities and the securities market operation;

            - knowledge of the Rules of Exchange Trading in Securities at the Toshkent’ Republican Stock Exchange;

            - knowledge of the provisions governing the admission to and business in securities at the Stock Exchange;

- knowledge of the provisions governing the activities of Stock Exchange Members;

            - knowledge of the mechanism of operation of the Stock Exchange’s Trading System and having professional skills for working at a trader’s AWP.

5. Based on the results of the examination, an employee of the Stock Exchange Member may be certified or not certified, which is reflected in the ‘Minutes of the Meeting of the Qualification and Certification Committee of the JSC “Toshkent” Republican Stock Exchange’, drawn up according to the standard form (Annex #5).
6. The minutes of the meeting of the Committee shall be signed by the Chairman and the Secretary of the Committee, as well as by the members of the Committee and filed.
7. In case if an employee of the Stock Exchange Member passed the certification, the Stock Exchange shall issue a ‘Certificate for Working in the Trading System of the JSC “Toshkent” Republican Stock Exchange as a trader’ to the employee within five working days from the date of certification (Annex #6).
8. 38. If an employee of an entity of the Stock Exchange Member is transferred to another entity that is also a Member of the Stock Exchange, the above certificates remains in force within the established terms of their validity.
9. Upon expiry of the validity period of the ‘Certificate for Working in the Trading System of the JSC “Toshkent” Republican Stock Exchange as a trader’, the employee of the Stock Exchange Member shall undergo recertification.
10. The Committee keeps the following registers:

- register of issuance of training certificates to work at a trader’s AWP at the JSC ‘Toshkent’ Republican Stock Exchange (Annex #7);

- log of registration of issuing certificates for working in the Trading System of the JSC ‘Toshkent’ Republican Stock Exchange as a trader (Annex #8).

Registers and logs are maintained in electronic format and printed as and when needed.

1. Procedure for Recertification of the Employees

of Members of the Stock Exchange

1. The employees of Members of the Stock Exchange shall undergo recertification in the following cases:-

             ‘Certificate for Working in the Trading System of the JSC “Toshkent” Republican Stock Exchange as a trader’ has expired;

             the Board of the Stock Exchange decides to refer an employee of the Stock Exchange Member for recertification in case if he/she violated the Rules of Exchange Trading in Securities at the JSC ‘Toshkent’ Republican Stock Exchange, and the relevant sanction has been applied to him/her.

2. Upon the expiry of the validity of the ‘Certificate for Working in the Trading System of the JSC “Toshkent” Republican Stock Exchange as a trader’, as well as based on the decision of the Stock Exchange Board to refer the employee of the Stock Exchange Member for recertification in case if he/she violated the Rules of Exchange Trading in Securities at the JSC ‘Toshkent’ Republican Stock Exchange, and the relevant sanction has been applied to him/her, the validity of the ‘Certificate for Working in the Trading System of the JSC “Toshkent” Republican Stock Exchange as a trader’ shall be temporarily suspended, and the employee of the Member of the Stock Exchange shall not be permitted to participate in stock trading.
3. Five (5) working days before the expiration of the validity of the ‘Certificate for Working in the Trading System of the JSC “Toshkent” Republican Stock Exchange as a trader’ issued to its employee, the Member of the Stock Exchange shall submit a standard form application (Annex #4) with a request to recertify the employee to the Board of the Stock Exchange.
4. Documents for certification of employees of the Stock Exchange Members shall be submitted and considered, and the Committee work for recertification shall be conducted in accordance with Sections IV and V hereof.
5. Based on the results of the recertification, an employee of the Stock Exchange Member may be certified or not certified, which is reflected in the ‘Minutes of the Meeting of the Qualification and Certification Committee of the JSC “Toshkent” Republican Stock Exchange’ (Annex #5).
6. In case if an employee of the Stock Exchange Member passed the recertification, the Stock Exchange shall issue a ‘Certificate for Working in the Trading System of the JSC “Toshkent” Republican Stock Exchange as a trader’ to the employee within five (5) working days from the date of the recertification (Annex #6).
7. In case if an employee of the Stock Exchange Member has failed the recertification, the Chairman of the Committee submits a report to the Board of the Stock Exchange so that the Board could make the corresponding decision.

VII. Organizing Supplementary Certification of the Employees of Members of the Stock Exchange

8. When adopting the new Rules (amended), which substantially change the mechanism of and procedure for stock trading, involving the commissioning new stock trading sections and floors, financial instruments, etc., the Board of the Stock Exchange may decide to conduct supplementary certifying the employees of the Stock Exchange Members, which is aimed at testing knowledge of the specified amendments and additions.
9. The supplementary certification shall be carried out by the decision of the Stock Exchange Board on the basis of the recommendation (report) of the Chairman of the Committee.
10. Based on the decision of the Board, the Committee draws up a relevant questionnaire and a schedule for supplementary certification of the employees of the Stock Exchange Members, which are approved by the Chairman of the Stock Exchange Board.
11. The Secretary of the Committee shall, in due course notify, the Stock Exchange Members of the date of supplementary certification in accordance with the approved schedule.
12. The Committee’s rules of procedure when conducting the supplementary certification shall be implemented in accordance with Section V hereof.
13. Upon the recommendation of the Chairman of the Committee, Board of the Stock Exchange has the right to extend the period of its conducting for a period of not more than one month from the date of starting the supplementary certification due to the significant amount of work on the supplementary certification of employees of the Stock Exchange Members.

54.In case if an employee of the Stock Exchange Member passed the supplementary certification, he/she shall receive the ‘Certificate for Working in the Trading System of the JSC “Toshkent” Republican Stock Exchange as a trader’.

5. The employees of the Stock Exchange Members who have not been certified based on the results of supplementary certification, as well as those who have failed to present themselves for supplementary certification, starting from the moment of their failure of the qualifying examination or failure to present themselves for the supplementary certification, shall not be allowed to participate in stock trading, and certificates issued by the Committee before the supplementary certification period shall be recognized invalid, which is formalized by the relevant decision of the Stock Exchange Board.
6. The employees of the Stock Exchange Members specified in Clause 55 shall undergo certification on equal bases in accordance with these Regulations.

VIII. Final Provisions

7. These Regulations, as well as subsequent amendments and additions hereto, come into force after approval by the Board of the Stock Exchange in accordance with the established procedure.
8. Disputes related to the admission of employees of the Stock Exchange Members to stock trading are resolved in accordance with the procedure established by law. 

List of Annexes

Annex 1a: Standard Form of the ‘Stock Exchange Member’s Application for Having its Employees Trained for Working in the Trading System of the JSC “Toshkent” Republican Stock Exchange’.

Annex 1b: Standard Form of the ‘Stock Exchange Member’s Application for Admission of its Employees to Certification’.

            Annex 2a: Standard Form of the ‘Contract of Training the Employees of the Stock Exchange Member for Working in the Trading System of the JSC “Toshkent” Republican Stock Exchange’.

            Annex 2b: Standard Form of the ‘Acceptance Certificate under the “Contract of Training the Employees of the Stock Exchange Member for Working in the Trading System of the JSC ‘Toshkent’ Republican Stock Exchange”.

            Annex 3: Standard Form of the ‘Record of Training Outcomes of the Employees of the Stock Exchange Member for Working in the Trading System of the JSC “Toshkent” Republican Stock Exchange’.

            Annex 4: Standard Form of the ‘Minutes of the Meeting of the Qualification and Certification Committee of the JSC “Toshkent” Republican Stock Exchange’.

Annex 5: Standard Form of the ‘Certificate of Competence of an Employee of the Stock Exchange’s Member’ Issued by the Qualification and Certification Committee of the JSC “Toshkent” Republican Stock Exchange.

            Annex 6: Standard Form of the ‘Certificate for Working in the Trading System of the JSC “Toshkent” Republican Stock Exchange as a Trader’ Issued to the Employee of the Stock Exchange Member by the Qualification and Certification Committee of the JSC “Toshkent” Republican Stock Exchange.

Annex 7: Standard Form of the ‘Log (Register) of Issuance of “Certificate of Competence of an Employee of the Stock Exchange’s Member” Issued by the Qualification and Certification Committee of the JSC “Toshkent” Republican Stock Exchange’.

Annex 8: Standard Form of the ‘Log (Register) of Issuance “Certificates for Working in the Trading System of the JSC ‘Toshkent’ Republican Stock Exchange as a Trader” Issued to the Employee of the Stock Exchange Member’.

4. These Regulations may be amended and/or added in case any amendments have been introduced into the legislation of the Republic of Uzbekistan Республики and the internal regulations of the Stock Exchange.