New normative document regulating rights and commitments of IFO bonsd market makers will be enacted on February 02, 2001

/IRBIS, Feb 02, 01/ - According to the decision of KASE board dated February 2, 2001, new normative document on "Rights and commitments of KASE members of category "K" holding market makers status for bonds of international financial organizations" will be put in force from the same date. This document is composed and confirmed according to "Market makers activity rules", which were approved on meeting of KASE members holding "K", "P", "H" category (report #7, Oct.14, 1999) and ratified by the decision of NSC Board of Directors #462 dated Oct.26, 2000 (Appendix 2). The IFO bonds admission order to circulation on KASE is regulated by "Rules of admission of IFO bonds to circulation at KASE" approved by the resolution of the NSC's directorate #766 dated Jan.31, 01 and ratified by meeting of KASE members holding "K", "P", "H" categories on Jan.17, 01. Market makers status includes responsibilities for support of at least single fixed quotation on purchase and another one on sale of municipal government securities (obligatory quotation). At the same time, market makers have to maintain minimal possible spread of an obligatory quotation, which must not exceed: - not more than 30 basic points, if minimal volume of purchase-sale quotations will be higher $25.0 th (or other currency of denomination) at face value; - not more than 50 basic points, if minimal volume of purchase-sale quotations will be higher $100.0 th (or other currency of denomination) at face value; - not more than 100 basic points, if minimal volume of purchase-sale quotations will be higher $300.0 th (or other currency of denomination) at face value; The basic point is 0.01% of net price of a bond (without accumulated interest) in percentage terms. Market makers are also supposed to put new quotation during one minute if the old one had been satisfied. Market makers hold a right to change prices of earlier announced obligatory quotations only in case of compliance with above-mentioned requirements to the spread. He could refuse to put obligatory quotations in case if the volume of purchased securities minus sold one (or volume of sold one minus the volume of purchased) exceeded $1.0 mln (or other currency of denomination) at face value. In case of extreme situation on the market, market-maker could take a one- hour time-out. During time-out he has a right to take off all quotations. Time- out right could only be executed once during the trading day. Market-maker or his representative must notify KASE broker about time-out. The important feature of market-makers is exemption from fees on deals with local executive bonds. Responsibility of IFO securities market-maker is regulated by new normative documents and implies penalty fees of $100-1000 charged in case of violation of above-stated rules. Besides he could be deprived of the status. The release of market-maker's responsibility could be executed only according to the appropriate notification from KASE. It could be done in following cases: - price fluctuations on the international market of IFO securities exceed 1,000 basic points during five business days, other cases related to uncertainty on the market; - the government bodies amend existing legislation that significantly affects domestic market of IFO securities; - internal and external imbalances that could significantly affect domestic market of IFO securities; The decision on release of municipal GS market-makers commitments before Exchange Council meeting is taken by KASE Board. The Exchange rules defined following international financial organisations (IFO): - Asian Development Bank (ADB); - African Bank of Development(ABD); - Bank for International Settlements (BIS); - European Bank for Reconstruction and Development (EBRD); - Islamic Development Bank (IDB); - Inter-American Development Bank (IADB); - International Financial Corporation (IFC); - International Bank for Reconstruction and Development (IBRD).