Regulation on the Operation of the Automated Trading System of the National Bank of the Kyrgyz Republic

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Date of creation: 2017-11-13

APPROVED by the Resolution of the Board of the National Bank of the Kyrgyz Republic No. 10\18 dated March 28, 2013

Regulation on the Operation of the Automated Trading System of the National Bank of the Kyrgyz Republic

(In the edition of the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated August 30, 2017 No. 2017-P-09/39-6-(DCP), and October 25, 2017 No. 2017-P-09/45-9-(NPA))

GENERAL PROVISIONS

This Regulation on the Operation of the Automated Trading System of the National Bank of the Kyrgyz Republic (hereinafter - Regulation) is developed to streamline the process of conducting operations in the financial market of the Kyrgyz Republic through the Automated Trading System of the National Bank of the Kyrgyz Republic (hereinafter - ATS).

The National Bank of the Kyrgyz Republic (hereinafter - National Bank) is the owner of the ATS. The software obtained by a Participant upon connection to the ATS is the property of the National Bank and shall not be transferred to third parties.

This Regulation includes the main requirements for the functioning of the ATS regarding: § definitions and terms; § access to the ATS; § work schedule/regulations; § settlement procedures; § rights, obligations and liabilities; § technical failures.

The requirements specified in this Regulation apply to the provisions and rules of the National Bank governing the detailed procedure for conducting operations in the ATS.

The detailed procedure for concluding operations in the ATS is regulated by the corresponding provisions and rules of the National Bank.

Participants of the ATS are defined by the corresponding provisions and rules of the National Bank.

The definitions and terms specified in this Regulation apply to all definitions and terms used in the corresponding provisions and rules of the National Bank governing the procedure for conducting operations in the ATS. The corresponding provisions and rules may use additional definitions and terms not specified in this Regulation.

DEFINITIONS AND TERMS

Automated Trading System of the National Bank of the Kyrgyz Republic (ATS) – a software-hardware complex of the National Bank designed to automate operations in the financial markets of the Kyrgyz Republic.

Operation authorization – a procedure performed by the dealer controller in the ATS to confirm and further execute an operation initiated by the dealer.

ATS Administrator - an employee of a structural subdivision of the National Bank who maintains ATS directories, determines the Participant's rights to use ATS information resources, and regulates the work procedure in the ATS and the process of concluding operations.

ATS Security Administrator – an employee of a structural subdivision of the National Bank responsible for managing user authorities in the ATS, issuing personal identifiers, certificates, and electronic digital signature (EDS) keys.

Cancellation – an action whereby, during the manual review period, a structural subdivision of the National Bank responsible for settling operations through the ATS cancels operations where national currency funds settlements have not been processed and takes corresponding actions to deduct fines.

Securities – securities issued by the National Bank and the Ministry of Finance of the Kyrgyz Republic. (In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated October 25, 2017 No. 2017-P-09/45-9-(NPA))

Gross Real-Time Settlement System of the National Bank (GRSTSS) - an interbank payment system designed for conducting large-value and time-sensitive payments, ensuring fast and final settlements on interbank financial markets. The operator of GRSTSS is the NBKR.

Depository – a legal entity of the Kyrgyz Republic carrying out depository accounting and storage of securities, registration of transfer, and confirmation of ownership rights to securities. (In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated October 25, 2017 No. 2017-P-09/45-9-(NPA))

Dealer – a person authorized by the Participant to submit orders and initiate operations in the ATS.

Order – a standardized form in the ATS confirming the Participant's intention to conclude an operation.

Identification – a procedure performed by users upon logging into the ATS to determine this user's rights to perform specific operations in the ATS.

Dealer Controller – a person authorized by the Participant to carry out authorization for operations initiated by the dealer.

Delivery versus Free (DvF) – an order execution procedure for securities where the transfer of securities across Participants' accounts does not imply monetary settlements controlled by the ATS and is carried out only after verification and confirmation of sufficient securities on the respective Participants' accounts intended for operation execution. (In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated October 25, 2017 No. 2017-P-09/45-9-(NPA))

Delivery versus Payment (DvP) – an order execution procedure for securities where the transfer of securities and remittance of funds across Participants' accounts is carried out only after verification and confirmation of sufficient securities and funds on the respective Participants' accounts intended for operation execution. (In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated October 25, 2017 No. 2017-P-09/45-9-(NPA))

Participant's Workstation – a personal computer located on the Participant's side with installed and configured ATS client software necessary for connection and operation as an ATS Participant.

Manual execution – an action whereby, during the manual review period, a structural subdivision of the National Bank responsible for settling operations through the ATS executes operations where monetary settlements have not been processed due to technical failures.

Manual review – a period during which a structural subdivision of the National Bank responsible for settling operations through the ATS carries out actions to cancel, accrue and deduct fines, and manually execute operations where monetary settlements have not been processed.

"Depo" account - an account at the Depository where securities accounting is maintained. (In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated October 25, 2017 No. 2017-P-09/45-9-(NPA))

Technical failure at the Participant's workstation – the inability of a Participant to conduct operations in the ATS for a certain period due to technical disruption of the standard interaction mode between the Participant's workstation and the ATS.

Technical failure in the ATS – the inability of Participants to conduct operations in the ATS for a certain period due to technical disruption of the standard functioning mode of the ATS.

Trading day - an official working day in the Kyrgyz Republic on which operations are conducted in the ATS. Typically, trading days are working days from Monday to Friday.

Trading session – a period of time within a trading day during which orders can be submitted and operations concluded between Participants in the ATS. Trading sessions are configured by the ATS Administrator separately for each type of operation.

Participant – a legal entity that has obtained access to the ATS.

ACCESS TO THE ATS

To connect to the ATS, a person intending to become a participant must meet the following requirements: § provide a letter of intent to connect to the ATS to the National Bank; § have a connection to the worldwide financial data transmission system SWIFT (have a SWIFT code); § meet the technical requirements specified in this Regulation; § comply with other requirements defined in the corresponding provisions and rules of the National Bank.

After completing the procedures and requirements specified in para. 31 of this Regulation, the ATS Security Administrator registers data on new Participant users (dealer, controller) in the system and assigns a user identification code for authorization in the system, as well as transfers certificates and electronic digital signature (EDS) keys to the Participant (hereinafter – EDS).

The information specified in para. 32 of this Regulation is transmitted by the structural subdivision of the National Bank responsible for information security and protection to the Participant in a sealed envelope.

Replacement of the personal data of users specified in para. 32 is carried out by the ATS Security Administrator upon prior written application of the Participant.

Each user must familiarize themselves with the "ATS User Manual", which is provided by the ATS Administrator to the Participant after completing the connection procedure.

The ATS Administrator notifies all Participants of each newly connected Participant to the ATS via the message transmission system in the ATS.

The following minimum hardware and software requirements must be met to operate in the ATS:

1. minimum requirements for operating in the ATS (excluding other applications on the PC): § RAM - at least 512 MB; § processor with a frequency of at least 1 GHz; § at least 1 GB free hard disk space; § connection speed to ATS servers at least 256 kbit/s; § monitor supporting screen resolution of at least 1024x768 pixels; § operating systems: Microsoft Windows 7, 2003 Server, Vista, Windows 2008 R2 with the latest service packs installed; § Internet browser Internet Explorer v.7.0 or newer, with the latest security updates installed;
2. recommended hardware configuration for operating in the ATS: § processor - Intel Pentium IV or higher; § RAM – 1 GB or higher; § 2 GB free disk space (preferably twice the volume of installed RAM, for stable and reliable OS operation); § connection speed to ATS servers at least 512 kbit/s; § monitor supporting screen resolution of 1280x1024 pixels. For ATS administrators, a monitor with resolution above 1280x1024 pixels and diagonal above 20” is recommended; § operating systems: Microsoft Windows 7/Server 2003/Vista/Server 2008, with the latest service packs installed; § Internet browser Microsoft Internet Explorer 7.0 or newer version, with the latest security updates installed.

WORK SCHEDULE / REGULATIONS

Participants conclude operations strictly based on submitted orders.

The ATS work schedule is presented as follows: № Time (Bishkek) Description 1 8:45 – 09:00 Opening of the business day 2 09:00 – 09:30 Redemption of securities and/or coupon payments on securities Settlements for the final part: § repo auctions § national currency deposit auctions § foreign currency swap auctions § gold operations § ownight deposits 3 09:00-13:00 Acceptance of orders for primary placement auctions of securities (on the day of the auction/secondary placement) 4 09:00-15:30 Acceptance and processing of orders for intraday credit 5 09:00-16:30 Acceptance and processing of orders for overnight credit Repayment of overnight credit on the next trading day Repayment of intraday credit Settlements for the final part of interbank operations initiated by Participants: § interbank repo operations § interbank foreign currency swap operations § interbank national currency loans secured by securities § interbank national currency unsecured loans § interbank foreign currency loans secured by securities § interbank foreign currency unsecured loans § gold operations 6 09:30 – 10:00 Settlement