LexInfoSys (University of Bremen)
legislative acts are available from this source
August 29, 1995.
The Law of the Azerbaijan Republic
About securities and stock exchange
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.
Securities and order of their circulation
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
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
· 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
· 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
· 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
· 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
2. Shares of all types can be given to owners only after their full
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
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
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
· 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
· data about placement of already issued securities;
· aim of bonds issue;
· type of bonds;
· number of bonds and general amount of emission, nominal value
· 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
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
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
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
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
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
· 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
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
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
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
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
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
· 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
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
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
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
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
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
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,
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
Article 36. Membership to stock exchange
1. Professional participants of securities market can be members of
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
3. There is no restriction on the maximum number of members of stock
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
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
Protection of investor interests
Chapter IX. Measures to protect investor interests
Article 41. Cancellation of transactions for subscription or purchase
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
During the period of securities circulation emitter is responsible
for recompense of investors with the losses, caused by unreliable information
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
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
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
Baku, November 24, 1992.
The Law of the Azerbaijan Republic
About amendments to laws of the Azerbaijan Republic
«About securities and stock exchanges»
and «About joint stock society»
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
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
Baku, August 29, 1995.
With amendments of August 29, 1995, No. 1093.