AFS Approves Amendments to Repo Transaction Rules
OREANDA-NEWS. July 16, 2009. It was informed earlier the Exchange Council of Kazakhstan Stock Exchange (KASE) on May 28, 2009 approved additions and changes No. 13 (amendments) to the KASE internal document "Rules on Repo Transactions" (the Rules), reported the press-centre of KASE.
The amendments were approved by the Agency of the Republic of Kazakhstan on Regulation and Supervision of Financial Market and Financial Organizations (AFS) on July 3, 2009 and are planned for introduction after the KASE trading system is modified and introduction of an interaction tool between KASE and Central Securities Depository.
According to amendments the Rules were amended with Appendix No. 1 "Agreement on general terms of nego repo transactions" (the Agreement), elaborated for purposes of reduction of risks of non-compliance by repo transaction participants carried out by nego method, with obligations on closing deals.
The agreement specifically determines:
- order of calculation of price of opening nego repo transaction, sum of closing deal and repo transaction rate;
- new order of settlement on nego repo transactions, including order of early execution of closing repo deal;
- interaction of repo transaction agents when the issuer of repo subject carries out corporate actions;
- order of revaluation of obligations on repo transactions;
- new order of settlement of non-compliance with obligations on repo transactions by repo agents.
As the Rules were added with the Agreement the Rules' text was amended numerously.
For purposes of compliance with item 38 of the Rules on carrying out activities of trade organizer in securities and other financial instruments, approved by resolution No. 170 of the Board of the Agency of the Republic of Kazakhstan on Regulation and Supervision of Financial Market and Financial Organizations (AFS) dated October 29, 2008, the text of the Rules was amended with a norm, specifying that "Securities shall be banned by the Exchange Board to be used as nego repo subjects, if in accordance with an internal document of the exchange "Securities valuation methodology" such securities were not evaluated for two weeks in row".
The renewed text of the Rules is available at the KASE website at:
http://www.kase.kz/files/normative_base/repo_eng.pdf.
Before the amendments are effective the KASE website will avail two versions of the Rules - a version, effective before the introduction of the amendments, and a version, effective beginning such date.
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