Regulatory Bylaw No. 31 for the Listing, Deposit, and Trading of Government Bonds in Iraq

Regulatory Bylaws of the Securities Commission 2022 Regulatory Bylaw No. (31) for the Listing, Deposit, and Trading of Government Bonds in Iraq

Based on the Securities Law No. 74 of 2004 and for the purpose of regulating the trading process of government bonds in the Iraqi Securities Market, we have issued the following regulatory bylaw:

Chapter One (Listing of Government Bonds)

Article (1)

First: The Central Bank of Iraq shall submit a request for the listing of national bond issuances, accompanied by the issuance details, to the Securities Commission within seven (7) working days from the date of the completion of the initial marketing by the issuing entity. The Commission shall undertake the following procedures:

1. Study the listing request and approve or reject it with reasons within seven (7) working days.
2. Failure to respond within the aforementioned period constitutes acceptance of the request.
3. In case of rejection, the requesting entity has the right to appeal in accordance with the Law.
4. The Commission shall notify the Council of Governors of the rejection under paragraph (1) above, along with a copy of the initial listing request.

Second: The request shall be accompanied by issuance details, including at least: • Issuance categories. • Duration of each issuance. • Interest rates (or discount rates) for each issuance. • Ownership registry (specifying the percentage of shareholder ownership on the foreign side). • Number of bonds per category. • Start and end dates of the issuance. • Any other information requested by the Commission.

Chapter Two (Deposit of Bonds)

Article (2)

The Depository Center shall deposit the bond in the name of the investor or through an authorized intermediary in the Depository Center, according to the bond category, in the Iraqi Securities Market. The Center shall undertake the following procedures:

First: Verification of the bond through confirming its validity issued by the issuing entity. Second: Reaching the maturity date. Third: Delivering the bond to the owner's name one day before the maturity date. Fourth: Endorsement to the Central Bank of Iraq for the holders of the bonds deposited at the Center to participate in the trading session one day before the maturity date. Fifth: Issuing a special code for the bond according to type and category on the electronic system. Sixth: Adopting the same procedures required when opening a trading account for investors who are bondholders. Seventh: Adopting the procedures followed by the Center when depositing bonds.

The Central Bank of Iraq shall provide the Center with a statement of issued bonds containing the following information: • Type of issuance (bearer or registered, interest rate or discount rate, issuance duration, issuance currency, maturity and redemption date). • Category. • Name of the bondholder. • Bond sequence for each bondholder. • Personal data of the bond owner (for the purpose of recording and building the bond registry in the Center).

C. Listing fees for bonds shall be 0.0002% of the issuance value.

Chapter Three (Trading of Bonds)

Article (3) (A)

First: The investor has the right to trade the bond (buy and sell) after its deposit in the Depository Center during trading sessions in the Iraqi Securities Market through authorized intermediary companies. Second: Trading in the market shall be according to the bond category, considering one unit equal to the bond category. Third: The value of the traded bond shall be in Iraqi Dinars or US Dollars, depending on its issuance. Fourth: The percentage of price fluctuation (up and down) for the bond in the market shall be determined by the Council of Governors upon acceptance of the issuance listing, subject to the Commission's approval, and determined based on (the calculated price of the bond on that day during the issuance period). Fifth: The commission of the intermediary company shall not exceed a maximum of 1000 Dinars and a minimum of 0.003% of the bond value at the time of trading, and the market commission shall be 0.3% of it. Sixth: Intermediary companies shall settle transactions accepted by investors and follow the deposit procedures for funds prepared for buying and selling through the clearing report approved by the Iraqi Securities Market and using the same mechanisms for trading shares and their financial settlements. Seventh: The regulatory bylaws governing the trading of shares shall be applied to the extent possible to benefit from them in bond trading. Eighth: Trading of bonds shall be conducted in five sessions per week from 10:00 AM to 12:00 PM daily by market brokers. Ninth: Trading of the bond shall be suspended thirteen (13) working days before the maturity date for the purpose of determining the final owner and updating the ownership registry. The bond ownership document must match the trading movement.

B. Disclosure

The Iraqi Securities Market shall provide the Central Bank of Iraq with the following: First: Daily trading report for bonds. Second: Disclosure of names of sellers and buyers daily. Third: Weekly report on bond trading. Fourth: Ownership registry not exceeding one working day before the bond maturity date.