The present Law determines uniform order of issue and circulation of securities, regulates activity of securities market participant with the aim of protection of interests of investors and assistance in the effective economic development of the Azerbaijan Republic.

Chapter I. General provisions

Article 1. Basic definitions
1. Securities are financial documents, certifying property rights or loan relations of the security owner to the emitter.
2. Emitter of securities is a legal entity, issuing (emitting) securities and bearing obligations before the owner of securities on them.
Emitter can be represented by the state, local administration authorities, enterprises and other legal entities (including joint ventures and foreign enterprises), registered on the territory of the Azerbaijan Republic.
3. Investor is a citizen or legal entity, acquiring securities on its behalf and at his expense. Foreign citizens and legal entities can operate as investor at the securities market of the Azerbaijan Republic in accordance with the present Law and the Law «About protection of foreign investments in the Azerbaijan Republic».

Article 2. Legislation about securities and stock exchange
1. Relations in connection with the issue and circulation of securities, professional activity of securities market participants are regulated by the present Law, other legislative acts of the Azerbaijan Republic and normative acts adopted in compliance with them.
2. The government of the Azerbaijan Republic and National Bank of the Azerbaijan Republic establish quotas and order of admittance of securities, issued by foreign emitters for circulation on the territory of the Azerbaijan Republic.

Article 3. Securities
1. Securities can be issued in the form of certificate forms printed on paper or records on accounts. In case of securities circulation in the form of records on accounts the owner of securities can fulfil his property rights in relation to emitter through specialised organisations, carrying out keeping, accounting and settlements in operations with securities.
2. In relation to fulfilment of property rights, connected to the ownership, there can be bearer and registered securities. Registered securities grant property rights, connected to the ownership to investor, whose name is indicated on them, whereas bearer securities grant this right to their direct bearer. The transfer of securities from one owner to another is carried out by change of corresponding records on the back of securities form (endorsement) and in the account.
3. The present Law regulates issue and sale of the following types of securities:
· shares;
· bonds;
· state treasury bonds;
· savings certificates.
4. Restoration of lost bearer securities is effected in the order, fixed by the civil legislation of the Azerbaijan Republic.
5. Inheritance of securities and payment of incomes on securities is carried out on the basis of a certificate, issued by the notary office.
 

Chapter II. Shares

Article 4. General characteristics of shares
1. Share is a securities, certifying contribution into charter funds of joint-stock societies and granting its owner the right to get part of joint-stock societies profit in the form of dividend and participate in their management (excluding owners of preference shares).
2. Shares of joint stock societies are distributed by open subscription to them or in the order of distribution of all shares between the founders. Joint-stock societies can issue preference shares. Minimum nominal cost of shares cannot be less than 100 roubles. Shareholders can be provided with a certificate for a total nominal cost of shares.
3. Share certificate is to indicate the following requisites:
· name of securities - «share», nominal cost, share category (common or preference);
· full name and legal address of emitter;
· full name of share buyer or record, that the share has been issued for bearer;
· place and date of issue, state registration number, share series;
· sample of signature (facsimile) of emitter's authorised persons;
· list of rights, granted to share owners.

Article 5. Rights granted to the owner of the share
1. The owner of the share is entitled to get part of joint-stock society profit in the form of dividends.
In case of liquidation of an emitter the owner of the share has the tight for part of emitter's property, left after payments to creditors and owners of preference shares.
The owner of the share has voting right at the general meeting of shareholders and participates in elections of management bodies and revision committee, and execution of control and confirmation of business policy in proportion to his share, unless otherwise specified by the present Law.
2. The share is indivisible. In cases when one and the same share belongs to several persons, they are all acknowledged as one owner of share and can carry out their rights through one of them.

Article 6. Issue of shares
1. The resolution about issues of shares is to be moved by the founders of joint-stock society or general meeting of shareholders in the order, specified by their bylaws and founding document.
2. Decision about issue of shares is drawn up with a minutes, which is necessary to indicate:
· full name and legal address of emitter;
· amount of charter fund and value of emitter's fixed and floating assets, aim and subject of his activity, as well as the list of emitter's officials;
· data about placement of already issued shares;
· aim of issue of this share;
· number of shares, including preference shares;
· total amount of emission, nominal value of shares, number of voters and voting results;
· order of dividends payment;
· term and order of subscription to shares;
· place and time of share payment;
· sequence of shares issue in case of their issue in different series;
· rights of owners of preference shares, rights of the first turn purchase during new emission of shares and other problems, connected to the issue of shares.
3. Issue of shares of joint-stock society is fulfilled in the amount of its charter fund.
Additional issue of shares by the joint-stock society is possible only in case, if all earlier emitted shares are purchased at the price, not less than the nominal. Initial sale of shares at prices lower than the nominal price is not permitted. It is banned to issue share to cover losses, connected to economic activity of the joint-stock society.

Article 7. Order of share purchase
1. The value of the share is expressed in manats independently of the payment form. Shares are paid in manats and in cases, specified by the bylaw of joint-stock society in foreign currency or by means of submitting other property. Emitters and investment institutions, carrying out sale of shares to their first owners according to agreement with emitter, are bound to provide them equal value conditions for the purchase of share (value of all shares of the same issue is to be equal at their sale to first owners).
2. Shares of all types can be given to owners only after their full payment.
3. In case of state enterprises being turned into joint-stock societies the preference right of purchase of enterprises shares is granted to members of working collectives of these enterprises.
4. Joint stock society can repurchase shares of the shareholder for their subsequent resale. The sale of these shares is to be carried out within one year. During this period profit distribution, as well as voting and quorum determination at the general meeting of shareholders are to be fulfilled without consideration of shares purchased by the joint-stock society.
5. Investor cannot transfer his property rights connected to share ownership to another person without full payment of all its shares.

Article 8. Payment of dividends on shares
1. Dividends on shares of joint-stock societies are paid taking into account results for a year at the expense of profit, left after payment of legally fixed taxes and other duties to budget. According to the resolution of general meeting of joint-stock society shareholders dividends on shares can be paid by quarters.
2. Dividends on preference shares are paid in the amount, not less than interest to their nominal value fixed in advance, independently of the profit amount, gained by the joint-stock society in the corresponding year. In case of insufficient profit payment of dividends on preference shares is carried out at the expense of reserve fund.
3. Demands of the preference share owner at the liquidation of joint-stock society are to be fully met in the first turn after satisfaction of creditor demands.
 

Chapter III. Bonds

Article 9. General characteristics of bonds
1. Bond is a security, certifying obligation of emitter to recompense the nominal value of the share to its owner with the payment of fixed dividend in established period (unless otherwise provided by the conditions of issue).
Bonds are issue in series of same securities with equal nominal value and conditions of issue and withdrawal.
2. The issue of following bonds is permitted:
a) bonds of republican and local loans;
b) bonds of enterprises and joint-stock societies.
Terms of issue and distribution of enterprises and joint-stock societies bonds are determined by the present Law, their bylaws and other documents regulating their activity.
3. Bond certificate is to indicate the following requisites:
· name of the securities - «bond»;
· full name and legal address of bonds' emitter;
· full name of buyer (for preference bonds);
· nominal value;
· amount of dividends;
· order and period of dividends payment;
· period of circulation;
· date of issue;
· state registration number, series and serial number of bond;
· samples of signatures (facsimile) of emitter's authorised persons and the rights, following from bonds.

Article 10. Issue of bonds
1. The Cabinet of Ministers of the Azerbaijan Republic, Cabinet of Ministers of the Nakhchivan Autonomous Republic, local administrative authorities make decision about issue of bonds of state and local loans accordingly.
2. Joint stock society can make decision about issue of bonds only after full payment of all shares by shareholders.
3. Decision about issue of bonds is taken by the enterprise (union or another organisation of the enterprise) in the order, specified by its bylaws or another document, regulating its activity.
4. Decision about issue of bonds is drawn up by the minutes , which should indicate:
· full name and legal address of bonds emitter;
· charter fund of emitter, conditions of loan provision, name of the document, regulating economic activity, as well as list of emitter's officials;
· data about placement of already issued securities;
· aim of bonds issue;
· type of bonds;
· number of bonds and general amount of emission, nominal value of bonds;
· place and time of means payment for the purchase of bonds;
· period of means repayment at the denial of bonds issue;
· period of bond circulation;
· order of bonds placement;
· order of bonds payment;
· other problems, connected to the issue of bonds.
5. The Cabinet of Ministers of the Azerbaijan Republic, the Cabinet of Ministers of Nakhchivan Autonomous Republic, local administrative authorities determine special conditions of bonds issue of republican and local, as well as purpose loans accordingly.

Article 11. Order of bonds purchase
1. Citizens at the expense of their personal means purchase bonds of all types. Enterprises purchase bonds of all types at the expense of profit, left at their disposal after payment of legally specified taxes and other duties to budget.
2. Bonds of all types are paid in manats and in cases, specified by the special terms of issue or bylaws of the enterprise, joint stock society or founding document - in foreign currency. Independent of the currency paid for a bond, its cost is expressed in manats.

Article 12. Payment of dividends on bonds
1. Dividends on bonds are paid in the order, specified by the terms of bonds issue after payment of all legally fixed taxes and other duties to budget.
2. In case of emitter's non-fulfilment of obligation on dividends payment and repayment of the nominal value of bonds the recovery of these amounts is to be effected compulsory in accordance with the legislation of the Azerbaijan Republic.
3. In case of emitter's bankruptcy demands of bonds owners as creditors are to be satisfied before the corresponding demands of owners of preference and common shares.
 

Chapter IV. State treasury bonds

Article 13. General characteristics of state treasury bonds
1. State treasury bonds represent a type of securities placed on a voluntary basis among the population, certifying the payments into the budget by their holders and empowering them to get fixed dividend during the period of ownership.
2. The following types of state treasury bonds are issued in the Azerbaijan Republic:
a) long term state treasury bonds, issued for bearer by the Ministry of Finance of the Azerbaijan Republic for the period from 5 to 20 years;
b) average term state treasury bonds, issued for bearer by the Ministry of Finance of the Azerbaijan Republic for the period from 1 to 5 years;
c) short term state treasury bonds, issued for bearer by the Ministry of Finance of the Azerbaijan Republic and Ministry of Finance of Nakhchivan Autonomous Republic.

Article 14. Issue of state treasury bonds
1. Decision about issue of long-term and average-term state treasury bonds is to be taken by the Cabinet of Ministers of the Azerbaijan Republic at the proposal of Ministry of Finance of the Azerbaijan Republic.
Decision about issue of short-term state treasury bonds is to be taken by the Cabinet of Ministers of the Azerbaijan Republic and Cabinet of Ministers of the Nakhchivan Autonomous Republic at the proposal of the Ministry of Finance of the Azerbaijan Republic and Ministry of Finance of the Nakhchivan Autonomous Republic.
2. The order of determination of sale value of state treasury bonds is to be fixed by the Ministry of Finance of the Azerbaijan Republic and Ministry of Finance of Nakhchivan Autonomous Republic.

Article 15. Payment of dividends on state treasury bonds
1. Long-term and average-term state treasury bonds, subject to repurchase are determined by repayment circulation, conducted annually by the Ministry of Finance of the Azerbaijan Republic.
2. Dividends to owners of average-term and short-term state treasury bonds are paid by means of adding interests to the nominal value without annual payments at their repurchase depending on the period from the issue of obligations until its repayment.
 

Chapter V. Savings certificates

Article 16. General characteristics of savings certificates
1. Savings certificates are granted as registered and bearer certificates. Registered savings certificates are not subject to circulation, whereas their sale (alienation by other means) is considered illegal.
Bearer savings certificates can unrestrictedly be sold and accepted for payment by all banking institutions (enterprises and organisations).
Registered savings certificate can be exchanged into bearer savings certificate at the discretion of its owner.
2. Savings certificates are to indicate the following requisites:
· name of the securities - «certificate»;
· name and legal address of crediting organisation, issued the certificate;
· serial number, date of issue;
· value of a deposit;
· period of deposit extraction (for time certificate);
· name of the owner, who placed deposit and is a holder of the certificate (for registered certificates);
· date of certificate sale, bank seal and signature of the bank's director or another authorised person.

Article 17. Issue of savings certificates
Savings certificates are granted by the banks of the Azerbaijan Republic at fixed contractually agreed interest for a certain period or poste restante.

Article 18. Purchase of savings certificates
Enterprises and citizens purchase savings certificates at the expense of means for bonds acquisition, specified by the Article 11 of the present Law.

Article 19. Payment of dividends on savings certificates
1. Payment of dividends on savings certificates is effected at the bearing of these certificates for payment in banking institution.
2. In case, if the holder of the certificate demands the repayment of deposited means at a time certificate before the period agreed, he is paid decreased dividend, the level of which is determined on contractual basis during the placement of a deposit.
3. In case of early bearing of the certificate for payment, its owner is paid the nominal value of the certificate and dividends are added at a decreased rate for an actual number of full years of certificate ownership.
 

Chapter VI. Order of registration, issue and circulation of securities

Article 20. General provisions
1. Order of putting into circulation and registration of securities is determined in accordance of the present Law on the territory of the Azerbaijan Republic.
2. The issue of securities, that have not come through state registration in the Ministry of Finance of the Azerbaijan Republic (Ministry of Finance of Nakhchivan Autonomous Republic) is illegal and in accordance with the legislation of the Azerbaijan Republic results in the withdrawal of them from their owners, seizure of emitter's profit for the sale of these securities and its return to the owners of securities.
3. The Cabinet of Ministers of the Azerbaijan Republic establishes general rules and annual quotas of admittance of securities, issued by foreign emitters to the circulation on the territory of the Azerbaijan Republic.
4. The Cabinet of Ministers of the Azerbaijan Republic is entitled to establish annual quotas for circulation of securities, issued or planned to be issued by emitters, falling within jurisdiction of the Azerbaijan Republic, outside the territory of the Azerbaijan Republic with consideration of Azerbaijan obligations under interstate agreements.

Article 21. Order of securities registration
1. Emitter gets the right to issue securities since the moment of securities registration and assignment of state registration number to them in the Ministry of Finance of the Azerbaijan Republic, Ministry of Finance of the Nakhchivan Autonomous Republic.
Registration of securities is conducted independently of the total volume of emission and method of subscription (open or close sale).
2. The following documents are to be submitted for the registration:
a) application for a registration of securities;
b) notarised copy of decision about issue of securities;
c) notarised copy of emitter's bylaw;
d) samples of securities;
e) bank reference about paying of not less than 30% (open sale) or 50% (closed sale) of shares' value to emitter's account by people, subscribed to shares;
f) bank reference about payment of earlier issued shares at the price not less than the nominal one during additional issue of shares;
g) prospectus of emission (if open sale of securities is planned), having been registered in the Ministry of Finance of the Azerbaijan Republic (Ministry of Finance of the Nakhchivan Autonomous Republic).
3. State registration (or refuse from it) is to be carried out not later than 30 days since the moment of application with enclosure of necessary documents. After registration securities are assigned state registration numbers.
Refuse of registration can be resulted only owing to the motives of infringement of established order or non-conformity of documents supplied with legal requirements. Emitter is informed in written form about refuse of securities issue registration.
Emitter can claim refuse of registration in court.
4. The Ministry of Finance of the Azerbaijan Republic keeps a state register of securities registered in the Azerbaijan Republic and regularly (not less than once a month) publishes list of newly registered securities.
5. State registration of securities and emission prospectus, conducted in accordance with the present Law cannot be considered a warranty of value of these securities.
6. A special duty is collected during the registration of securities issue and their emission prospectuses; the amount and order of its payment is to be determined by the Ministry of Finance of the Azerbaijan Republic.

Article 22. Emission prospectus
1. Data that stated in the emission prospectus and published statements about securities are to be reliable and applicable for evaluation of economic and financial status of emitter.
Officials of emitter signed the emission prospectus (information) bear legally fixed responsibility for reliability of data in it and for observance of rules of securities issue.
2. Data, containing in the emission prospectus cannot be of more than six months period for the moment of its publishing.
3. The emission prospectus is to indicate the following data:
· full name and legal address, date of foundation and subject of emitter's activity;
· date and number of minutes of decision about issue of securities;
· aim of use of financial means, gained as a result of emission; planned volume of emission;
· type of securities and rights connected with it;
· number, nominal value of securities emission;
· quantity and serial numbers of series;
· place, date of beginning and end of sale;
· information about possible privileges of securities owners; name of professional participant of securities market (if emitter uses his services);
· method of calculation and period of payment of dividends;
· addresses of places where dividends payments, carrying out of operations and depositing will be effected;
· terms of bonds backing.
The Ministry of Finance of the Azerbaijan Republic is responsible for the completeness of information, contained in emission prospectuses and does not bear any responsibility for their reliability.
4. If some legal entity operates as guarantor for the execution of liabilities stated in securities, the emission prospectus is to indicate data, related to such guarantee.
5. Emission prospectus is to be published in press. Open sale or advertisement of securities in press before emission prospectuses registration in the Ministry of Finance of the Azerbaijan Republic is prohibited.
6. In case of occurrence of some changes in the situation compared with the status of initially published emission prospectus during the placement of securities, emitter is bound to register these changes in the Ministry of Finance of the Azerbaijan Republic and inform subscribers about these changes.

Article 23. Issue of securities
1. Issue of securities (emission) can be carried out in following forms:
a) without declaration of an open sale and conducting of advertisement campaign (close sale);
b) with publishing of emission prospectus (open sale).
2. Emitter and investments institutions, fulfilling sale of securities to their first owners under agreement with emitter are entitled to choose any procedure for issue, not contradicting legislation of the Azerbaijan Republic and present Law.
3. Acquisition of more than 35 percent of share of any emitter, or shares, guaranteeing over 50 percent of shareholders votes, by one legal entity or citizen or a group of legal entities, having concluded agreement between themselves or executing control over the property of each other, is to be regulated by the anti-monopoly legislation of the Azerbaijan Republic.
This requirement does not cover joint-stock societies with charter fund over one million year.

Article 24. Order of banning or suspension of securities issue
1. The Ministry of Finance of the Azerbaijan Republic can ban or suspend the issue of securities in case of:
a) infringement of the legislation in force;
b) unsatisfactory financial-economic status of emitter; availability of due indebtedness to creditors and on budget payments; not fully paid charter fund for the moment of making decision about securities issue; non-conformity of data in emission prospectus with actual facts.
Ban of securities issue motivated by unreasonable character of it is not permitted.
2. In case of suspension of securities issue by the Ministry of Finance of the Azerbaijan Republic emitter is bound to eliminate infringements, caused suspension, after that the issue can be continued at the special written permission of the Ministry of Finance of the Azerbaijan Republic.
3. If emitter considers ban for securities issue ungrounded, he can claim this decision in the corresponding court.

Article 25. Circulation of securities
1. Professional participants of securities market at discretion of the parties can carry out transactions with circulation (sale-purchase) of securities after their initial placement.
2. For each transaction dealing with sale-purchase of securities either of the parties is to pay stamp duty; the amount and order of its payments determined by the Cabinet of Ministers of the Azerbaijan Republic.
3. Securities rate is fixed in manats.

Article 26. Regular information about emitter of securities
Emitter is bound to publish in a newspaper of Republican significance, as well as submit to the corresponding financial body general information about its financial and economic status and results of activity (hereinafter referred to as annual report of emitter) once a year. Requirements to the content of annual emitter's report are set by the Ministry of Finance generally and the National Bank of the Azerbaijan Republic in relation to banking organisations in particular.
 

Chapter VII. Professional activity applied to securities

Article 27. Kinds of professional activity applied to securities
1. The following kinds of activity can be applied to securities:
a) mediator activity with securities;
b) commercial activity with securities;
c) commission activity with securities;
d) other kinds of activity.
2. Mediator activity is the purchase and sale of securities at the expense and on commission of a client.
3. Commercial activity applied to securities represents fulfilment of transactions on purchase and sale by professional participant of securities market at his own expense and on its behalf. Banks cannot fulfil commercial activity on securities of emitters they don't serve.
4. Commission activity applied to securities is a purchase and sale of securities with obtaining of commissions by professional participants of securities market on their behalf or at the expense of client.
5. Other kinds of activity, being interconnected with above kinds of activity, are conducted by legal and natural entities first of all in the rendering of consultation services on operations with securities.
6. Consultation services on securities problems can be rendered only by persons, engaged in professional activity with securities.

Article 28. Licensing of professional activity on securities
The Ministry of Finance of the Azerbaijan Republic carries out licensing of professional activity on securities. It includes licensing of professional participants of securities market and attestation of their employees.
License can be granted on separate kind of activity for implementation of several kinds of professional activity with securities.

Article 29. Professional participants of securities market
Professional participants of securities market represent legal entities of any form of property, conducting one or several kinds of activity, enumerated in the article 27 and obtained license for professional activity on securities. Unlicensed professional activity on securities is prohibited.

Article 30 Qualification and other requirements to professional participants of securities market
1. The Ministry of Finance of the Azerbaijan Republic establishes qualification and financial requirements to professional participants of securities market, their managers and employees, necessary for obtaining a licence for implementation of professional activity on securities.
2. License of professional participant of securities market is granted to legal entities provided they have at least one employee, having come through the attestation of Azerbaijan Ministry of Finance, in their staff.

Article 31. Order of account of operations with securities
To ensure conformity with the regulation of professional activity on securities the Ministry of Finance and State Statistical Committee of the Azerbaijan Republic fix common rules of accounting and reporting on operations with securities.

Article 32. Restriction of professional activity on securities
License giving the right of professional activity on securities in the capacity of professional participant is not granted or can be recalled in cases, when legal entity, applying for it or already having it:
a) is the owner (co-owner, partner, shareholder, etc.) of another legal entity, that already has the license for implementation of professional activity on securities in the amount, not exceeding 10 % of its charter fund;
b) is the owner (co-owner, partner, shareholder, etc.) at the amount, exceeding 5% of the charter fund of any other professional participant of securities market, fulfilling commercial activity.
The only exclusion is a professional participant of securities market, having obtained license for implementation of commercial activity on securities.
Limit of his participation makes 10% in charter funds of commercial organisations, being professional participants of securities market.

Article 33. Cancellation and suspension of a license for professional activity on securities
The Ministry of Finance of the Azerbaijan Republic can cancel or suspend the operation of license or certificate for professional activity on securities, if professional participant of securities market or its employee:
a) misrepresents data in the application for obtaining a license or in reports;
b) breaks rules and requirements of implementation of professional activity on securities, set by the present Law, the Ministry of Finance of the Azerbaijan Republic.

Chapter VIII.  General provisions

Article 34. Definition and legal status of stock exchange
Stock exchange is an organisation with the right of a legal entity, set up to ensure necessary conditions to professional participants of securities market for the trade of securities, provision of their normal functioning, determination of their rate (market price) and data publication for information of all interested persons, regulation of activity of securities market participants.

Article 35 Founding of stock exchange
1. Stock exchange is to be found in the form of close joint stock society and have not less than 10 persons in its composition.
2. Only legal entities can be the founders of stock exchange.
3. Conditions for the founding of stock exchange are necessary to provide, that:
a) joint stock society was registered in accordance with the legislation in force and obtained license for the right of fulfilling its functions from the Ministry of Finance of the Azerbaijan Republic. The license is granted only at the lack of claims on documents submitted. Documents are considered for not later than 30 days since the date of their presentation to the Ministry of Finance of the Azerbaijan Republic.;
b) bylaw and rules of stock exchange stipulated open membership to it for professional participant of securities market, provided observance of principles of fair competition between market participants, protection of investors from anti-legal actions on the part of stock exchange members and employees.

Article 36. Membership to stock exchange
1. Professional participants of securities market can be members of stock exchange.
2. Member of stock exchange has equal rights. Unequal position of members of stock exchange, temporary membership, as well as lease of broker place to people, not having membership to stock exchange (stock department) are not permitted.
3. There is no restriction on the maximum number of members of stock exchange.
4. Members of stock exchange can be state administrative authorities, law-enforcement bodies, their officials and specialists.

Article 37. Activity of stock exchange
1. Stock exchange independently elaborates and confirms the order of fulfilment of transactions in trade hall, accounts and settlements on transactions, different rules and other documents, connected to its activity, in accordance with the present Law.
2. Stock exchange can fulfil its activity, connected to the rendering of additional services to participants of securities market, including keeping, account of securities, creation of information networks, editions, and other services. Stock exchange is prohibited to carry out commercial activity, its activity does not aim at profit extraction and shareholders of the stock exchange are not paid dividends.
3. If the activity of stock exchange contradicts to legislation in force, punishment measures are to be applied to it in accordance with the legislation of the Azerbaijan Republic.
4. Stock exchange elaborates and publishes rules of admittance and rates of securities at its auctions.
5. Stock exchange fixes rules of admittance of securities for trade (listing) or their exclusion from trade (dislisting).
6. Financing of stock exchange activity can be fulfilled at the expense of sale of stock exchange shares, giving the right of membership; exchange duties from each transaction, carried out at the stock exchange; other incomes from stock exchange activity.
7. Stock exchange can not be a party in the transaction at its own auctions, excluding cases of initial placement through exchange or sale and purchase of its shares.
8. During control over the use of licenses for stock exchange activity at the securities market the Ministry of Finance of the Azerbaijan Republic (Ministry of Finance of the Nakhchivan Autonomous Republic) has the right to demand any unconfidential documents, connected to the activity of stock exchange or stock department of exchange, as well as conduct audits of stock exchange activity (stock department of exchange) at place.

Article 38. Termination of stock exchange activity
The activity of stock exchange is to be stopped, provided:
a) the general meeting adopts decision about termination of stock exchange activity without assigning successors;
b) the number of stock exchange founders is less than the number, specified by the article 35 of the present Law.
The Ministry of Finance of the Azerbaijan Republic recalls issued license for stock exchange activity in case, if practice of stock exchange does not correspond to the legislation of the Azerbaijan Republic; members and managers of stock exchange infringe the legislation of the Azerbaijan Republic and routine of the stock exchange.

Article 39. Requirements to members and employees of stock exchange
1. Natural entity, having share participation in the charter fund of the stock exchange member cannot take leading position or be an employee of another member of the exchange engaged in the fulfilment of transactions at stock exchange.
2. Employees of the stock exchange, managers and employees of stock exchange members cannot take leading positions at the emitter of securities, quotated at the stock exchange and be in working relations with him, as well as be founders of emission.
3. Employees of stock exchange cannot use or transfer information about securities, emissions or transactions at the stock exchange, excluding regularly published data, declare anything on behalf of exchange or express its opinion above the limits of their authorities.

Article 40. Use of title «stock exchange»
1. Joint stock society, obtained a license of the Ministry of Finance of the Azerbaijan Republic for carrying out stock auctions with securities, is to have a title «stock exchange» in written form in its name.
2. Title «stock exchange» or name, where the expression «stock exchange» is used, can be use only in the trade name either for business or advertisement purposes only the organisation, which has been set up in the order, specified by the article 35 of the present Law.

Chapter IX. Measures to protect investor interests

Article 41. Cancellation of transactions for subscription or purchase of securities
1. If emitter corrects the emission prospectus during the period of open sale of securities, persons, having subscribed to securities or bought them, can cancel the transaction within 15 days after publication of the data, if they consider that such correction can have a negative effect on the securities rate (value). In case of cancellation of the transaction by a buyer emitter is responsible for compensation of expenses and losses of investor, connected to the subscription or purchase of securities.
2. Registration authorities are bound to consider claims and protests of buyers of securities for breaking by the emitter the order of issue, fixed by the legislation in force.

Article 42. Compensation of losses, caused by unreliable information about securities
During the period of securities circulation emitter is responsible for recompense of investors with the losses, caused by unreliable information about securities.

Article 43. Prohibition of abuse of confidential information
Neither persons, due to his position having an access to confidential information, referring to an emitter or securities and able to influence the market value of securities, cannot use this information for personal advantage or its transfer to this parties, as well as give advice to third party the operations with securities on the basis of this information. Persons, not fulfilling these requirements, are made responsible in accordance with the legislation of the Azerbaijan Republic.

Article 44. Restrictions to the fulfilment of operations with securities by persons, having access to confidential information
Citizens, having access to confidential information, related to enterprises-emitters, as well as members of their families can purchase securities of these emitters only on the condition, that they will keep securities at home for not less than one year.
Such persons include:
a) officials of enterprises-emitters (including members of supervisory council and members of administration);
b) employees of auditor firms, examining this enterprise-emitter;
c) officials and employees of the Ministry of Finance of the Azerbaijan Republic, state administrative authorities, attracted for work with securities, as well as employees of organisations, having licenses for implementation of professional activity on securities.

Article 45. Distribution of unreliable information with the aim of changing securities rate
Legal entities and citizens, distributing unreliable information about emitter with the aim of taking advantage from the change of its securities rate, can be made responsible for that at statements of injured party to recover losses in accordance with the legislation in force.

Article 46. Economic sanctions for infringement of requirements of the present Law
1. Incomes, gained as a result of infringement of the present Law, are recovered into state budget of the Azerbaijan Republic with deduction of amounts, subject to return to investor in case of transaction cancellation.
2. Professional participants of securities market bear material responsibility before the investor for the amount of damage, caused to him by the fulfilment of transactions with forged securities, documents of non-existing emitters or confirming the ownership of non-existing values; unregistered documents, document, the professional participant of security market does not have ownership or disposal right for, on sale of one security to several investors, and connected to other infringements of the present Law.

The President of the Azerbaijan Republic
Abulfaz Elchibey.
Baku, November 24, 1992.
No. 383.

The National Meeting of the Azerbaijan Republic decrees:

1. Paragraph 1 of the Article 8 of the Azerbaijan Republic Law «About securities and stock exchanges» (Register of the Supreme Council of the Azerbaijan Republic, 1992, ¹ 22, p.952) after word «paid» is to be added with words «as a rule», the said paragraph complete with the following sentence: «At the resolution of the general meeting of shareholders of joint stock society the dividends on shares can be paid by quarters».

2. To complete paragraph 1 of the Article 9 of Azerbaijan Republic Law «About joint stock society» (Register of the Supreme Council of the Azerbaijan Republic, 1994, ¹ 21, p. 316) with the following sentence: «At the resolution of the general meeting of shareholders of joint stock society the dividends on shares can be paid by quarters».

3. The present Law comes into forces since the date of publishing.

The President of the Azerbaijan Republic
Heydar Aliyev
Baku, August 29, 1995.
No. 1093.
With amendments of August 29, 1995, No. 1093.