KASE significantly changed admission rules for municipal bonds

/IRBIS, Sep 26, 00/ - By the decision of the Board of Kazakhstan Stock Exchange #82/0 dated Sep 20, 2000, new amendments and modifications will be put in force into "Rules of Admission of Government Securities to Circulation at KASE" (the Rules) since Sep 25. The present amendments and modifications was approved by the resolution of Directorate of National Securities Commission of the Republic of Kazakhstan #665 dated Sep 18 and also accepted by the meeting of KASE shareholders holding "K", "P", "H" on Aug 8, 2000 (protocol #5). Besides purely editorial corrections, the amendments contain new, detailed and broadened requirements to issuers of bonds of local executive bodies - municipal GS admitted to circulation at KASE. Notion on Financial Consultant was introduced in the new wording. This organisation executes preparatory work over the introduction of securities on the market. It as well consults issuers and carries out other functions in agreement with executive bodies. There were made some extensions related mainly to the list of documents required from the issuer to be submitted to KASE for admission of municipal to the circulation. Further to this list the initiator of the admission should submit following: - data on budget dispatches for last three years and the current one; - documents confirming increase in budget revenues and expenditures on the sum equal to issue volume and their servicing and repayment; - investment memorandum including description of investment projects which will be financed by the issue; description of risks related to possible default of municipal authorities to repay debt; - notarially registered card with samples of signatures and stamps imprint of the local executive body; - agreement on circulation of local executive bodies securities on the Exchange trades that must be signed by authorised person and ratified by the stamp; - the application of one of the KASE member on execution of market-maker activity over the securities of local executive bodies admitted to the circulation (this requirement will be put in force since Jan 01, 2001. All issues admitted before this term will not be subjected to these rules). Besides above-mentioned requirements, local executive authorities were obliged to pay listing fee as it had been stipulated by the Exchange Council. In case if securities were accepted to circulation, local executive body will be submitting to KASE following documents during whole period of bonds maturity: - reports on budget performance for the past year; - data on fulfilment of current obligations on issued securities; - budgets for the financial years following from the year of placement as far as their approval; - information on budgets dispatches for financial years following from the year of placement as far as their approval; - information on development of projects financed by the issue; - data on execution of current obligations to holders of securities. According to the new edition of the Rules, circulation of local executive securities might be temporary suspended or ceased by the decision of Exchange Council. This is a case if local bodies do not fulfil or delay the fulfillment of obligations set by securities issue terms and by the present Rules, or issue market-makers refused to carry out responsibilities (last requirement will be put in force since Jan 01, 2001. All issues admitted before this term will not be subjected to these rules).