Legea nr. 171 din 11.07.2012 privind piaţa de capital (Law No. 171/2012 on the Capital Market)

English translation of the Romanian text from cnpf.md (the Romanian text is the official one). Retrieved 2026-10-26.

L A W on the capital market no. 171 of 11.07.2012 Official Gazette no.193-197/665 of 14.09.2012

• • • C O N T E N T S Chapter I GENERAL PROVISIONS

Article 1. Scope of regulation

Article 2. Subjects of this law

Article 3. Exceptions

Article 4. Categories of financial instruments

Article 5. Regulatory objectives

Article 6. Definitions Chapter II SECURITIES Section 1 Issue of securities

Article 7. General provisions on the issue of securities

Article 8. Particularities of the issue of bonds

Article 9. Particularities of the issue of Moldovan depositary receipts Section 2 Rights over securities

Article 10. Record of rights over securities

Article 11. Transfer of ownership over securities

Article 111 . Procedure for cancellation, issuance and sale of participation shares held in non-compliance with the requirements regarding the quality of shareholder in the capital of banks

Article 12. Encumbering securities with obligations Section 3 Public offers of securities

Article 13. General provisions on the public offer

Article 14. The prospectus of the public offer

Article 15. Approval of the prospectus of the public offer

Article 16. Publication of the prospectus of the public offer

Article 17. Advertising of the public offer

Article 18. Supplement to the prospectus of the public offer

Article 19. Powers and responsibilities of the National Commission on public offers Section 4 Takeover offers

Article 20. General regulations on the takeover offer

Article 21. Mandatory takeover offer

Article 22. Competitive takeover offers

Article 23. Fair price

Article 24. Information on the takeover offer and approval of the prospectus

Article 25. Publication of the prospectus and advertising of the takeover offer

Article 26. Amendment of the takeover offer

Article 27. Revocation of the takeover offer

Article 28. Responsibilities of the issuer in the case of the takeover offer

Article 29. Nullity of restrictions

Article 30. Request for mandatory withdrawal

Article 31. Request for mandatory acquisition

Article 32. Making payments Chapter III INVESTMENT COMPANIES Section 1 General provisions on investment services and activities

Article 33. Types of investment services and activities

Article 34. Regulation of investment services and activities Section 2 Requirements on the conduct of activity

Article 35. Investment company license

Article 36. Accepted persons

Article 37. The delegated agent

Article 38. Capital adequacy

Article 39. Requirements for persons who manage the activity of the investment company

Article 40. Requirements for persons with qualifying holdings

Article 401 . Cancellation, issuance and sale of holdings held in non-compliance with the requirements regarding the quality of shareholder in the capital of the investment company Section 3 Requirements on the organization and operation of investment companies

Article 41. General organizational requirements

Article 42. Compliance verification

Article 43. Risk management

Article 44. Internal audit

Article 45. Restrictions on personal transactions

Article 46. Conflicts of interest

Article 47. Custody of clients' assets

Article 48. Settlement of complaints Section 4 Protection of the interests of clients of investment companies

Article 49. Rules of conduct

Article 50. Outsourcing of important and essential operational functions

Article 51. Execution of orders under the most favorable conditions for clients

Article 52. Obligations related to contracting a delegated agent

Article 53. Transactions with eligible parties Section 5

Rights of the investment company

Article 54. Freedom to provide services and to carry out activities

Article 55. Access to regulated markets

Article 56. Access to the central depository and to clearing and settlement systems Section 6 Requirements regarding market transparency and integrity, ensured by investment firms

Article 57. Record keeping

Article 58. Transaction records and reporting

Article 59. Post-trading transparency requirements Chapter IV CAPITAL MARKET INFRASTRUCTURE Section 1 Market operators

Article 60. General provisions regarding market operators and regulated markets

Article 61. Market operator license

Article 62. Requirements regarding the activity of market operators Section 2 Regulated markets

Article 63. Regulated market authorization

Article 64. Rules of the regulated market

Article 65. Members of the regulated market

Article 66. Admission to trading on regulated markets of financial instruments

Article 67. Admission to trading on the regulated market of corporate securities

Article 68. Admission to trading on the regulated market of securities issued by the Ministry of Finance, the National Bank of Moldova, local public administration authorities and international public bodies

Article 69. Trading of financial instruments on the regulated market

Article 70. Suspension of trading and withdrawal of financial instruments

Article 71. Transparency requirements Section 3 Multilateral trading systems (MTF)

Article 72. General provisions regarding MTF

Article 73. MTF authorization

Article 74. MTF rules

Article 75. Admission to trading within the MTF of financial instruments

Article 76. Admission to trading within the MTF of corporate securities

Article 77. Admission to trading within the MTF of securities issued by the Ministry of Finance, the National Bank of Moldova, local public administration authorities and international public bodies

Article 78. Other requirements regarding the activity of the MTF Section 4 Clearing and settlement

Article 79. Clearing and settlement of financial instruments

Article 80. Finality of settlements in the settlement system for financial instruments

Section 5 Central depository

Article 81. General provisions regarding the central depository

Article 82. Central depository license

Article 83. Requirements regarding the activity of the central depository

Article 84. Rules of the central depository Section 6 Registry companies

Article 85. General provisions regarding registry companies

Article 86. Registry company authorization

Article 87. Organizational requirements regarding registry companies

Article 88. Keeping the register of holders of securities Chapter V COLLECTIVE INVESTMENT UNDERTAKINGS IN SECURITIES Section 1 Activity of collective investment undertakings in securities (UCITS)

Article 89. General provisions

Article 90. Issuance of the prior opinion upon the establishment of the UCITS

Article 91. The issue prospectus

Article 92. The investment company

Article 93. The general meeting of shareholders

Article 94. The investment fund

Article 95. Fund units of the investment fund

Article 96. The register of holders of fund units

Article 97. Subscription of fund units of the investment fund

Article 98. Redemption of fund units of the investment fund

Article 99. The fund rules

Article 100. Activity of the investment management company

Article 101. Expenses of the investment fund and expenses of holders of fund units

Article 102. Dissolution of the investment fund

Article 103. “Master-feeder” structures Section 2 The investment management company

Article 104. Competence of the investment management company

Article 105. Obligations of the investment management company. Restrictions with respect to the investment management company

Article 106. The investment management contract Section 3 The depositary

Article 107. General provisions

Article 108. Activities carried out by the depositary

Article 109. Obligations of the depositary

Article 110. Liability of the depositary

Article 111. Termination of the custody contract

Section 4 Investment policy of UCITS

Article 112. Investments of UCITS

Article 113. Risk management system Section 5 Protection of holders of shares of the investment company and of units of investment funds

Article 114. Rules on transparency and advertising

Article 115. Protection of investors' rights Section 6 Reorganization of UCITS

Article 116. Reorganization of UCITS

Article 117. Joint-stock companies whose activity contains the characteristics of the UCITS activity Chapter VI INVESTOR PROTECTION Section 1 Disclosure of information

Article 118. General provisions on disclosure of information

Article 119. Disclosure of information by issuers

Article 120. Annual report of the issuer

Article 121. Half-yearly report of the issuer

Article 122. Interim statements of the issuer's management

Article 123. Events influencing the issuer

Article 124. Documents of incorporation

Article 125. Disclosure of information on major shareholdings

Article 126. Other requirements on disclosure of information Section 2 Capital market abuse

Article 127. Inside information

Article 128. Market manipulation

Article 129. Obligations of investment firms regarding market abuse Section 3 Investor compensation fund

Article 130. General provisions

Article 131. Investor compensation

Article 1311 . Compensation of clients of fiduciary administrators

Article 132. Resources of the Fund

Article 133. Payment of compensations

Article 134. Exclusion of compensations

Article 135. Obligations of investment firms regarding informing clients

Article 136. Imposition measures Section 4 Professional clients and qualified investors

Article 137. Professional clients

Article 138. Qualified investors Chapter VII REGULATION, SUPERVISION AND CONTROL

Article 139. General provisions

Article 140. Regulation through licensing and authorization

Article 141. Supervision and control of the capital market

Article 1411 . Prudential supervision of investment firms

Article 142. Investigations

Article 143. External audit

Article 144. Infringements and sanctions

Article 145. Exemption from publication of decisions

Article 146. Cessation of activity on the capital market of licensed or authorized persons

Article 1461 . Cessation of activity on the capital market of fiduciary administrators Chapter VIII FINAL AND TRANSITIONAL PROVISIONS

Article 147. Entry into force Parliament adopts this organic law.

This law transposes the following European Union directives:

Directive No. 97/9/EC of 3 March 1997 of the European Parliament and of the Council on investor-compensation schemes, published in the Official Journal of the European Communities No. L 84 of 26 March 1997;

Directive No. 98/26/EC of 19 May 1998 of the European Parliament and of the Council on settlement finality in payment and securities settlement systems, published in the Official Journal of the European Communities No. L 166 of 11 June 1998;

Directive No. 2001/34/EC of 28 May 2001 of the European Parliament and of the Council on the admission of securities to official stock exchange listing and on information to be published on those securities, published in the Official Journal of the European Communities No. L 184 of 6 July 2001;

Directive No. 2003/6/EC of 28 January 2003 of the European Parliament and of the Council on insider dealing and market manipulation (market abuse), published in the Official Journal of the European Union No. L 96 of 12 April 2003;

Directive No. 2003/71/EC of 4 November 2003 of the European Parliament and of the Council on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC, published in the Official Journal of the European Union No. L 345 of 31 December 2003;

Directive No. 2004/25/EC of 21 April 2004 of the European Parliament and of the Council on takeover bids, published in the Official Journal of the European Union No. L 142 of 30 April 2004;

Directive No. 2004/39/EC of 21 April 2004 of the European Parliament and of the Council on markets in financial instruments, amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC, published in the Official Journal of the European Union No. L 145 of 30 April 2004;

Directive No. 2004/109/EC of 15 December 2004 of the European Parliament and of the Council on the harmonisation of transparency requirements in relation to information about issuers

whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC, published in the Official Journal of the European Union No. L 390 of 31 December 2004;

Directive No. 2006/49/EC of 14 June 2006 of the European Parliament and of the Council on the capital adequacy of investment firms and credit institutions, published in the Official Journal of the European Union No. L 177 of 30 June 2006;

Directive No. 2006/73/EC of 10 August 2006 of the Commission implementing Directive 2004/39/EC of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive, published in the Official Journal of the European Union No. L 241 of 2 September 2006;

Directive No. 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), published in the Official Journal of the European Union No. L 302 of 17 November 2009.

Directive No. 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive No. 2002/87/EC and repealing Directives No. 2006/48/EC and No. 2006/49/EC, published in the Official Journal of the European Union L 176 of 27 June 2013 [Art. 4(5), Art. 28, Art. 65(3), Art. 74(1), Art. 76(2), Art. 97(1)(a), Art. 97(2)–(4), Art. 99(1)–(3), Art. 103(1) and Art. 104(1)(a), (c), (e), (g), (i), (j) and (l)].

[Preamble as supplemented by Law No. 33 of 16.03.2018, in force 06.04.2018]

Chapter I GENERAL PROVISIONS

Article 1. Scope of regulation

(1) This law regulates the activity of investment firms, undertakings for collective investment and the Investor Compensation Fund, public offers, takeover offers, capital market infrastructure, including regulated markets, defines capital market abuse and establishes requirements regarding information disclosure for the purpose of maintaining high standards of activity on the capital market, as well as creating optimal conditions for financial investments.

(2) Any activity on the capital market shall be carried out in accordance with the provisions of this law, other applicable legislative acts and the acts of the National Commission of the Financial Market (hereinafter – the National Commission).

(3) The National Commission is the competent authority for the implementation of this law in accordance with the powers established by Law No. 192-XIV of 12 November 1998 on the National Commission of the Financial Market.

(4) For the implementation of this law, the National Commission adopts regulatory decisions and individual decisions and issues notes or letters of an explanatory and recommendatory nature.

Article 2. Subjects of this law

(1) This law applies to natural and legal persons of the Republic of Moldova, foreign natural and legal persons and stateless persons who provide services or carry out activities on the capital market or who hold or intend to hold financial instruments issued by issuers from the Republic of Moldova.

(2) The provisions of this law apply to commercial banks that carry out investment services and activities, with the exceptions provided by this law.

(3) Commercial banks provide investment services and carry out investment activities in accordance with the provisions of this law and with the normative acts on the activity of financial institutions.

(4) The provisions of this law do not apply to clearing and settlement systems for transactions with money market instruments and state securities carried out outside the regulated market and/or outside the multilateral trading system, as well as to clearing and settlement systems authorized by the National Bank of Moldova, which target financial institutions.

(5) The provisions established in section 1 and section 2 of chapter VI apply to issuers whose securities meet one of the following conditions:

a) are admitted to trading on the regulated market and/or within a multilateral trading system;

b) have been the subject of a public offer.

(6) The provisions of chapter III do not apply to undertakings for collective investment in transferable securities.

Article 3. Exceptions This law does not apply:

a) in the case of public sector debt management involving the National Bank of Moldova, institutions holding similar functions of the member states of the European Union, the Ministry of Finance and other public authorities;

b) to persons who provide investment services exclusively to their parent company, their subsidiaries or other subsidiaries of their parent company;

c) to persons who trade financial instruments on their own account, except when they are market makers, or who trade on their own account, in an organized, frequent and systematic manner outside a regulated market or a multilateral trading system, by offering a system accessible to third parties for the purpose of expanding trading with them;

d) to persons who provide investment advisory services in the exercise of another core activity that is not regulated by this law, provided that the provision of these advisory services is not remunerated separately from the core activity;

e) to persons whose main activity consists in trading on their own account in commodities and derivative instruments of these commodities;

f) to persons who provide investment services occasionally within a professional activity, when this is regulated by legislative acts or a code of conduct that does not exclude the provision of this service;

g) to persons whose investment services consist exclusively in the management of an employee participation scheme;

h) undertakings whose investment services and activities consist exclusively in dealing on own account on markets in financial futures or options or other derivative markets and spot markets solely for the purpose of obtaining positions on the derivative markets, or undertakings that deal or ensure price formation on behalf of other members of those markets and are consequently covered by a guarantee of a clearing member of those markets where the responsibility for the contracts concluded by those undertakings is assumed by a clearing member of the same markets.

[Art.3 amended by Law no.242 of 29.12.2015, in force 29.01.2016]

Article 4. Categories of financial instruments

(1) The financial services and activities regulated by this law concern the following financial instruments:

a) securities;

b) units (shares) issued by collective investment undertakings in securities;

c) money market instruments;

d) options contracts, futures contracts, swap contracts, forward contracts on the interest rate and any other financial derivative instruments relating to securities, currencies, interest rates, rates of return, financial indices or goods;

e) financial derivative instruments for the transfer of credit risk;

f) financial contracts for differences;

g) other financial instruments admitted to trading on a regulated market and/or within a multilateral trading system.

(2) This law regulates securities and units issued by collective investment undertakings in securities. The financial instruments indicated in para.(1) letters c)–f) are regulated by this law only in the case of their trading on regulated markets or within a multilateral trading system. The admission of financial instruments on regulated markets or within a multilateral trading system takes place after their registration with the National Commission in the manner established by its normative acts.

(3) In accordance with this law, the following financial instruments are considered securities:

a) shares and other securities equivalent to shares, including depositary receipts for such securities;

b) bonds and other types of debt securities, including depositary receipts for such securities;

c) any other financial instruments that can be converted or that offer the right to buy or sell the securities specified in letters a) and b).

Article 5. Regulatory objectives In the field of the capital market, the regulatory objectives of the National Commission are:

a) maintaining and promoting fairness, efficiency, transparency and order on the capital market;

b) protecting the rights and interests of persons who invest in financial instruments within public offers and/or who use investment services;

c) preventing cases of violation of legislation in the field of the capital market;

d) reducing systemic risks on the capital market;

e) maintaining the financial stability of the Republic of Moldova by taking adequate measures with regard to the capital market;

f) educating the general public about the capital market, financial instruments, investment services and activities.

Article 6. Definitions

(1) For the purposes of this law, the following notions are defined:

financial analyst – relevant person who prepares an investment study;

firm commitment – the commitment of the investment company to subscribe the financial instruments that have not been requested;

auditor – audit company or individual entrepreneur auditor who holds a license for carrying out audit activity;

mandatory withdrawal request – request addressed by holders of voting securities regarding the acquisition of these securities, carried out under the conditions provided by this law;

clearing – conversion into a single net claim or net obligation of the claims and obligations resulting from transfer orders, which one or more participants issue in favor of one or more participants or receive from one or more participants, resulting in the fact that only a single net claim can be enforceable and only a single net obligation is owed;

client – any natural or legal person to whom an investment company provides investment services and/or auxiliary services;

retail client – the client who is not a professional client;

professional client – the persons specified in art.137 para.(1);

investment company – collective investment undertaking in securities, legal person, constituted in the form of a joint-stock company in accordance with the provisions of this law and of Law no.1134- XIII of 2 April 1997 on joint-stock companies, which places and redeems its shares at the request of the shareholder;

investment advice – the provision of individual recommendations to a client, either at his request or at the initiative of an investment company, taking into account the particularities of the respective client relating to one or more transactions with financial instruments, and which relate to:

a) the purchase, sale, subscription, exchange, redemption or holding of a financial instrument;

b) the exercise or non-exercise of a right conferred by the financial instrument regarding the purchase, sale, subscription, exchange or redemption thereof;

control – situation in which the natural or legal person meets at least one of the following conditions:

a) holds alone or together with persons acting in concert the majority of voting shares or participation quotas of a commercial company;

b) alone or together with persons acting in concert holds a number of voting shares or participation interests that allows it to appoint or revoke the majority of the members of the company's board, the executive body or the majority of the members of the executive body and/or the auditor or the majority of the members of the audit committee;

c) exercises a dominant influence over a commercial company of which it is a shareholder or associate, under a contract concluded with the company in question or under a clause in the articles of incorporation or the company's articles of association;

d) is a shareholder or associate of a commercial company and alone controls, under an agreement concluded with other shareholders or associates of the company in question, the majority of voting rights;

custody – activity carried out by the depositary of the assets of a collective investment undertaking in transferable securities, by the central depositary, by the investment company for the purpose of safekeeping and/or recording of clients' financial instruments and monetary funds, in accordance with the requirements of this law;

depositary of the assets of collective investment undertakings in transferable securities – commercial bank holding a license from the National Bank of Moldova to carry out financial activities, responsible for the tasks provided for in section 3 of chapter V and subject to the other provisions set out in chapter III;

public interest entity – entity meeting at least one of the following criteria:

a) a financial institution, an insurance company, a leasing company, a voluntary pension fund;

b) an issuer whose transferable securities are admitted to trading, at the request or with the consent of the issuer, on a regulated market;

execution of orders relating to financial instruments on behalf of clients – carrying out the measures necessary for the conclusion of sale or purchase transactions of financial instruments on behalf of clients;

exposure for sale – period between the date of registration of the offer for sale of transferable securities with the market operator/system and the date of execution/expiry of the offer;

outsourcing – transfer by the investment company of certain functions to another person;

investment fund – collective investment undertaking in transferable securities without legal personality, established on the basis of a civil partnership contract, which continuously and without

delay places and redeems participation titles in the form of fund units and carries out its activity in accordance with the provisions of this law and with the normative acts of the National Commission;

insider – any person holding inside information;

money market instruments – instruments normally traded on the money market, which are liquid and whose value can be determined precisely at any time, including government securities issued for a term of up to one year, certificates of deposit and other similar instruments, excluding payment instruments;

qualified investor – the persons specified in art.138 para.(1);

close links – situation in which two or more natural or legal persons are linked by:

a) participation, which means the direct or indirect holding of at least 20% of the voting rights or of the share capital of a commercial company;

b) control, which means the relationship between a parent company and a subsidiary or a similar relationship between any natural or legal person and a commercial company; any subsidiary of a subsidiary shall be considered a subsidiary of the parent company, which is in fact the entity controlling these subsidiaries. A close link shall also be deemed to exist where two or more natural or legal persons are permanently linked to one and the same person by a control relationship;

portfolio management – management of a portfolio consisting of one or more financial instruments, on a discretionary and individualized basis, in accordance with the mandate given by the client;

market maker – person continuously present on the capital market, who buys and sells financial instruments on its own account, at prices set by it;

offeror – natural or legal person making an offer of transferable securities;

takeover offer – mandatory or voluntary offer addressed to all holders of voting transferable securities of a joint-stock company concerning the purchase of all or a certain number of transferable securities, which seeks or has as its objective the acquisition of control over the company that issued these transferable securities; an offer made by the issuing company in respect of its own transferable securities shall not be considered a takeover offer;

public offer of transferable securities – communication addressed to persons, made in any form and by any means, which presents sufficient information about the terms of the offer and about the transferable securities offered, so as to enable the investor to adopt a decision regarding the purchase or subscription of these transferable securities;

market operator – legal person that administers and/or operates a regulated market;

collective investment undertaking in transferable securities (hereinafter – UCITS) – entity with legal personality, established by articles of incorporation in the form of an investment company or by a civil partnership contract, without constituting a legal person, in the form of an investment fund, which operates on the principle of risk diversification and whose activity consists in attracting and collecting available monetary funds from natural and/or legal persons by issuing and placing shares or fund units for the purpose of their subsequent investment in transferable securities and/or in other types of financial instruments or other assets in accordance with the provisions of art.112 para.(1);

qualified participation – the direct or indirect holding of at least 10% of the share capital of an investment firm, of a market operator, of an issuer or a holding that allows the exercise of a significant influence over their management;

eligible parties – the categories of professional clients specified in Art. 137 para. (2) items 1) and 2);

persons acting in concert – two or more persons, linked by an express agreement (verbal or written) or tacit, who cooperate with the offeror or with the company for the takeover of control of the company in question. Until proven otherwise, the following persons are presumed to act in concert:

1) persons affiliated with the legal person (issuer, offeror, holder of securities):

a) members of the company's board, members of the executive body, members of the audit committee, persons with management positions of the managing organization (fiduciary administrator), the head of the auditor exercising the functions of the audit committee, other persons with management positions, as the case may be (heads of subsidiaries, chief accountant, etc.);

b) the spouse, relatives and in-laws up to and including the second degree of the natural persons specified in item a);

c) the natural or legal person who, individually or together with its affiliated persons specified in item a) and item b), holds control in the respective legal person;

d) the commercial company in which the respective legal person, individually or together with its affiliated persons specified in item a) and item b), holds control;

e) the legal person together with its affiliated persons specified in item a) or the natural person acting on behalf of or on account of the respective legal person;

f) the legal person together with its affiliated persons specified in item a) or the natural person on whose behalf or on whose account the respective legal person acts;

g) the legal person together with its affiliated persons specified in item a) or the natural person acting jointly with the respective legal person;

h) the legal person which, jointly with the given legal person, is under the control of a third person;

i) any other natural or legal person whose affiliation is demonstrated by the issuer, by the holder of securities, by the court or by the National Commission, as the case may be;

2) persons affiliated with the natural person (offeror, holder of securities):

a) the spouse, relatives and in-laws up to and including the second degree of the respective natural person;

b) the commercial company in whose capital the respective natural person, individually or together with its affiliated persons specified in item a), holds control;

c) the legal person which together with its affiliated persons specified in para. (1) item a) or the natural person acting on behalf of or on account of the respective natural person;

d) the legal or natural person on whose behalf or on whose account the respective natural person acts;

3) the parent company together with the subsidiaries, as well as any of the subsidiaries of the same parent company among themselves;

4) the legal person with its pension funds and with the management company of these funds.

The qualification of direct and indirect affiliation with respect to an issuer, offeror or holder of securities, as well as the cases of application of affiliation for the identification of direct or indirect holdings in the share capital of the commercial company, for the qualification of manipulations on the capital market are established in the normative acts of the National Commission;

persons managing the activity of the investment firm – natural persons who hold a management and administration position within the investment firm and who can influence the decisions of the investment firm. In the case of investment firms that are not commercial banks, persons managing the activity of the investment firm may be the sole executive body, the members of the collegial executive body and/or the members of the company's board who carry out their activity within the investment firm under an individual employment contract and who, according to the internal regulations of the investment firm, hold the competence to manage its activity. In the case of commercial banks, persons managing the investment firm may be the sole executive body, the members of the collegial executive body and/or the members of the company's board and the heads of the subdivision responsible for the activity on the capital market who carry out their activity within the commercial bank under an individual employment contract and who, according to the internal regulations of the investment firm, hold the competence to manage its activity;

relevant persons – the following categories of persons:

a) members of the board, members of the executive body and of the audit committee and employees of the investment firm;

b) the tied agent of the investment firm who is a natural person;

c) members of the board, members of the executive body and of the audit committee and employees of the tied agent of the investment firm which is a legal person;

d) persons who hold shares and/or stocks in the capital of investment firms and/or of tied agents;

e) any natural person who represents the investment firm or the tied agent for carrying out an investment activity or for providing an investment service;

f) any natural person who, under an outsourcing agreement, is directly involved in carrying out an investment activity or in providing an investment service to the investment firm or to the tied agent;

regulated market – a multilateral system, administered and operated by a market operator, which ensures or facilitates the matching, in accordance with its own non-discretionary rules, of multiple buy-sell orders for financial instruments received from third parties, in a manner that leads to the conclusion of contracts regarding financial instruments admitted to trading, in accordance with its rules, and which is authorized and operates regularly in accordance with the provisions of this law;

potential buyer – the natural or legal person who, alone or together with persons acting in concert, intends to buy directly or indirectly shares in the capital of an investment company;

offer program – a plan that would allow the issuance of securities that are not equity securities on a continuous or repeated basis, within a determined term;

acquisition project – the intention of a potential buyer to purchase a stake in the share capital of the investment company;

Moldovan depositary receipt – a security issued on the basis of a share or bond issued by a foreign issuer, which confers the right to receive dividends and any other payments paid by the foreign issuer in respect of these shares and bonds, as well as other related rights;

family relationship – a person's relationship with persons who are in one of the following situations:

a) spouse of the person;

b) natural child or stepchild in the person's care;

c) any other relative of the person who lives with the person in the same dwelling for at least one year;

restructuring of the issue(s) of securities – modification of the number of shares and/or the nominal (fixed) value of all securities of a certain class, and/or the size of the share capital, which, as the case may be, may be accompanied by the consolidation, splitting or conversion of the securities of that class;

registered office of the investment company – the location where the persons who effectively manage the activity of the investment company regularly perform their duties. The registered office of the investment company, a legal person from the Republic of Moldova, must be located on the territory of the Republic of Moldova and indicated in the statute of the investment company;

multilateral trading system (hereinafter – MTF) – a multilateral system, operated by an investment company or a market operator, which ensures the matching, in accordance with its own non-discretionary rules, of multiple buy-sell orders for financial instruments received from third parties;

fiduciary investment management company – an investment company holding a category B or C license, whose activity consists in providing specific asset management services, on a contractual basis, in accordance with the provisions of this law and with the normative acts of the National Commission;

investment company – a legal person whose activity consists in providing investment services and/or carrying out investment activities on a professional basis;

investment study – research, analysis or information presented in another form, which recommends or proposes an investment strategy, in a certain manner, regarding one or more financial instruments or the issuers of financial instruments, including any opinion regarding the current or future value or price of these instruments or issuers, which is intended for various forms of distribution, including through the mass media, electronic resources or the public, and which meets the following conditions:

a) is named or described as investment research or in similar terms or is presented as an objective or independent explanation of the content of the recommendation;

b) is not investment advice;

equity securities – shares and other securities similar to shares, as well as any other type of securities, which can be converted into shares or which offer the right to buy shares of the same issuer;

personal transaction – a transaction with financial instruments, carried out directly or indirectly by the relevant person, if it meets at least one of the following conditions:

1) the relevant person acts outside the activities they carry out within the activity of the investment company or the delegated agent;

2) the transaction is carried out on account of:

a) this relevant person;

b) any person with whom they have a family relationship or with whom they have close links;

c) the person who is in such a relationship with the relevant person that the relevant person has an interest, direct or indirect, as a result of the transaction, other than the tax or commission charged for carrying out the transaction;

dealing on own account – concluding transactions with financial instruments on own account;

fund units – dematerialized financial participation securities, in the form of entries made in accounts, issued by an investment fund, which attest the holder's right to a part of the assets of the respective fund and whose acquisition represents the only way of investing in an investment fund;

usufruct over securities – the right of a person (usufructuary) to use for a determined or determinable period the securities belonging by right of ownership to another person (bare owner) and to benefit from the rights granted by these securities, except for the right to alienate them. The manner of constituting the usufruct over securities, of registering and deregistering it from the register of securities holders is established in the normative acts of the National Commission;

securities that are not equity securities – bonds and other types of debt securities, as well as any other type of securities that can be converted or that offer the right to purchase bonds and other types of debt securities of the same issuer;

securities issued continuously or repeatedly – securities of the same class issued continuously or in at least two distinct tranches over a term of one year;

transferable securities – the following types of securities:

a) shares and other securities equivalent to shares (referred to as shares);

b) bonds and other debt securities (referred to as bonds);

c) any other negotiable securities that give the right to acquire such securities through subscription or exchange.

(2) The National Commission is entitled, ex officio or at the request of an interested party, to issue decisions in the form of rulings of assessment and qualification of a person, institution, situation, of certain information, operations, financial instruments or legal acts.

[Art.6 completed by Law no.33 of 16.03.2018, in force 06.04.2018]

[Art.6 amended by Law no.180 of 25.07.2014, in force 15.08.2014]

Chapter II SECURITIES Section 1 Issue of securities

Article 7. General provisions regarding the issue of securities

(1) Shares and any other securities that can be converted or that offer the right to purchase or sell shares may be issued only by joint-stock companies.

(2) Bonds and any other securities that can be converted or that offer the right to purchase bonds may be issued by joint-stock companies and by local public administration authorities.

(3) Moldovan depositary receipts may be issued only by investment companies holding a category C investment company license.

(4) The issue of securities may be carried out:

a) through public offering;

b) through private offering (closed issue).

(5) Securities that will constitute the object of a public offering and/or will be admitted for trading on the regulated market or within the MTF, except for state securities, are to be registered by the National Commission.

(6) Until the registration of securities by the National Commission in accordance with para.(5), public offering of securities is prohibited.

(7) Securities are issued only in registered dematerialized form, which represents entries made in the personal accounts of persons registered in the register of securities holders.

(8) Securities regulated by this chapter may be issued only in national currency.

(9) Registration of securities takes place in accordance with the provisions of this law, of the Civil Code of the Republic of Moldova no.1107-XV of 6 June 2002 and of Law no.1134-XIII of 2 April 1997 on joint-stock companies.

(10) The stages, terms, manner and procedures for registration of securities, as well as the documents necessary for registration, are established in the normative acts of the National Commission.

(11) Grounds for refusal to register securities may be:

a) non-compliance of the information contained in the submitted documents, of the manner of their adoption with the provisions of the legislation;

b) existence in the submitted documents of information denoting non-compliance of the conditions of issue and circulation of securities with the provisions of the legislation, as well as the existence of false or erroneous information;

c) failure to remove the objections found in the submitted documents.

Article 8. Particularities of the issue of bonds

(1) Issuers specified in art.7 para.(2) are entitled to issue:

a) covered bonds – bonds covered by pledge of own assets and/or by pledge of third-party assets, and/or with bank guarantee, and/or by suretyship, and/or by guarantee insurance policy;

b) uncovered bonds – bonds that do not involve the forms of coverage established in letter a).

(2) Uncovered bonds may be issued if they offer the right to be converted into shares or if the issuer cumulatively meets the following conditions:

a) the value of equity capital is greater than one million lei;

b) has been carrying out activity for at least 3 years and in the last 2 years has obtained net profit; in the case of commercial banks – has been carrying out activity for at least one year and has completed the year with net profit;

c) during the last 3 years, and in the case of commercial banks – during the last year, until the date of taking the issue decision, has not been held liable for violation of the provisions of legislation on disclosure of information and on the rights of securities holders;

d) has no cases of non-execution or non-compliance with the deadlines for execution of its obligations towards holders of previously placed bonds, as the case may be.

(3) The value of the bond issue, the related interest and other expenses of the issuer related to the redemption of bonds cannot exceed:

a) 90% of the value of the pledge of own assets and/or of third-party assets – in the case of bonds covered by pledge of own assets and/or third-party assets;

b) the value of the bank guarantee, suretyship and/or guarantee insurance policy – in the case of bonds covered by bank guarantee, suretyship and/or by guarantee insurance policy;

c) 90% of the value of the issuer's equity capital – in the case of uncovered bonds.

(4) Covered bonds grant the holder all rights arising from this coverage. The transfer of ownership over the covered bond to the new holder has as effect the transfer of all rights arising from this coverage.

(5) The bank guarantee, used as a form of coverage of bonds, cannot be withdrawn or cancelled. The bank guarantee must be valid until the issuer honors all debts related to the redemption of the bonds. If the bank that granted the respective guarantee becomes insolvent, the issuer is obliged, within at most 15 working days from the date of the declaration of insolvency, to take measures to replace the guarantee.

(6) A legal entity may have the capacity of surety if, during the performance of the suretyship contract, it has own capital exceeding the value of the bond issue and the interest related thereto.

(7) The suretyship contract shall also contain information regarding the surety's compliance with the requirements set out in this article and its undertaking not to alienate its patrimony until the issuer fully honors, in accordance with the loan conditions, the obligations.

(8) The National Commission is entitled to require the issuer to conclude another suretyship contract if the initial surety no longer meets the requirements of this law, or to require a change in the form of coverage.

(9) The market value of the pledged goods serving as coverage for the bond issue shall be determined by an independent appraiser.

(10) During the circulation period of the bonds, the constituted pledge may not be removed from the pledge register.

(11) In the case of non-payment or partial payment, through the fault of the issuer, of the interest related to the bonds or of their nominal value upon their extinguishment, the issuer is obliged to pay the bondholders the amount owed and a penalty for each day of delay, which is equal to the base rate of the National Bank of Moldova on the date of performance of the financial obligation applied to the outstanding amount.

(12) The extinguishment of bonds is carried out through their redemption by the issuer. The issuer is not entitled to reject a bondholder's request for redemption of the bonds if the latter acts in accordance with the conditions stipulated in the public offering prospectus and/or the issue decision.

(13) At the maturity of the bonds, established in the public offering prospectus and/or the bond issue decision, their circulation ceases.

(14) The amounts related to the extinguishment of bonds that have not been received by the bondholders shall be transferred to the bondholder's bank account or, if they cannot be transferred to the bondholder's bank account, shall be kept in a separate bank account of the

issuer for the satisfaction of the legitimate claims of the bondholders. The funds in this separate bank account of the issuer may not be used by the latter for other purposes.

(15) The right to submit a request for forced execution by the issuer of its obligations towards the bondholders arises if the issuer has not honored its payment obligations towards the bondholders within the term established by the public offering prospectus and/or the issue decision.

(16) The forced execution by the issuer of its obligations, in the event of the situation mentioned in para. (15), shall be carried out towards all bondholders according to their list, drawn up by the person keeping the register of bondholders at the date of expiry of the bond circulation term.

Article 9. Particularities of the issue of Moldovan depositary receipts

(1) Moldovan depositary receipts may be issued only against shares and bonds that have been issued by foreign issuers and have been subject to registration by the competent foreign authority.

(2) Foreign securities that are the subject of a public offering conducted on the territory of the Republic of Moldova may only have the form of Moldovan depositary receipts.

(3) The value of the issue of Moldovan depositary receipts shall not exceed the market value of the shares and bonds issued by foreign issuers, on the basis of which the Moldovan depositary receipts are issued, at the time of their issue.

(4) The issuer of Moldovan depositary receipts is obliged:

a) to pay to the holders of Moldovan depositary receipts the dividends and any other payments paid by the foreign issuer;

b) to redeem the Moldovan depositary receipts at the request of their holders;

c) to publicly disclose and/or provide to the holders of Moldovan depositary receipts the financial statements and any other information disclosed by the foreign issuer.

(5) The issuer of Moldovan depositary receipts is not entitled:

a) to issue Moldovan depositary receipts with a maturity longer than the shares and bonds of the foreign issuers that formed the basis for the issue of the Moldovan depositary receipts;

b) to alienate, until the maturity of the Moldovan depositary receipts, the shares and bonds of the foreign issuers that formed the basis for the issue of the Moldovan depositary receipts.

(6) The issuer of Moldovan depositary receipts is entitled to charge a fee for the activities specified in para. (4) letters a) and b), which shall be indicated in the decision to issue the Moldovan depositary receipts and which may not be modified until their maturity.

(7) In the event of insolvency of the issuer of Moldovan depositary receipts, the shares and bonds of the foreign issuer, as well as the dividends and any related payments paid by the foreign issuer, shall not be included in the debtor's estate, but shall be used entirely for the redemption of the Moldovan depositary receipts from their holders.

Section 2 Rights over securities

Article 10. Record of rights over securities

(1) The issuer of securities is obliged to ensure the record of rights over the securities from the moment of their placement.

(2) The records of ownership rights over securities shall be kept by means of entries in the personal accounts opened in the name of the holders of securities in the register of holders of securities, in the manner established by the normative acts of the National Commission.

Article 11. Transfer of ownership rights over securities

(1) Within clearing and settlement systems, the transfer of ownership rights over securities, except for the securities referred to in Art. 4 para. (3) letter c), takes place on the settlement date, based on the transfer order, under the principle of "delivery versus payment".

(2) Outside clearing and settlement systems, the transfer of ownership rights over securities, except for derivative securities, takes place in accordance with civil legislation and is recorded in the record-keeping system within at most 3 working days.

(3) The ownership right over securities arises on the date of registration of the person in the register of holders of securities.

(4) When carrying out transactions with securities, the person shall give consent regarding the processing of personal data by the competent authorities.

[Art. 11 supplemented by Law no. 33 of 16.03.2018, in force 06.04.2018]

Article 111. The procedure for cancellation, issuance and sale of participation shares held in non-compliance with the requirements regarding the quality of shareholders in the capital of banks

(1) By derogation from the provisions of Law no. 1134/1997 on joint-stock companies, the executive body of the bank whose holders of securities fall, as the case may be, under the incidence of the provisions of the legal framework related to banking activity, which concern the cancellation of bank shares, within at most 15 days from the date of expiry of the term granted to the holders of securities for the sale of the shares, shall issue and submit to the National Commission the decision on the cancellation of these shares and the issuance of new shares in the same number and of the same class.

(2) The decision of the executive body of the bank shall include information regarding the nominal (fixed) value of the newly issued shares, the term for offering them for sale and the conditions under which the initial offering price for sale will be established, taking into account the provisions of para. (11).

(3) The National Commission shall issue the decision on the registration related to the striking of the cancelled shares with the restructuring of previous share issues and the decision on the registration of the newly issued shares, within at most 15 days from the date of submission to the National Commission of the decision provided for in para. (1), attaching the corresponding documents. The registration of the share issue shall be carried out in accordance with the normative acts of the National Commission.

(4) Within at most 3 days from the date of registration of the newly issued shares in accordance with para. (3), the central depository/registry companies/investment companies that keep the records of holders of securities that have fallen under the incidence of the provisions of the legal framework related to banking activity, which concern the cancellation of bank shares, based on the decision of the executive body of the bank and the decision of the National Commission, shall ensure the making of entries regarding the cancellation of shares from the accounts of the corresponding holders of securities and the entry regarding the newly issued shares in the bank's account.

(5) By derogation from the provisions of Art. 25, para. (4) of Law no. 1134/1997 on joint-stock companies, the newly issued shares and registered in the bank's account, until their sale in accordance with this article, are non-voting shares in circulation, do not offer the right to receive dividends and a part of the company's assets in the event of its liquidation and cannot constitute a contribution to the share capital of a commercial company. The shareholders of the bank do not have a pre-emption right over the newly issued shares under the conditions of this article.

(6) Within at most 5 days from the establishment of the initial price in accordance with para. (11) of this article, the bank shall offer the newly issued shares for sale and shall disclose to the public, in the manners established in

Art. 16 para. (2) letters a), c) and d), the information provided for in Art. 14 para. (1), as well as a description of the bank's business and financial situation over the last 3 years.

(7) The term for the sale of the newly issued shares by the bank shall not exceed 3 months from the date of offering them for sale, except as indicated in para. (8). The newly issued shares may be offered for sale only after the establishment of the initial price under the conditions of para. (11).

(8) The National Bank of Moldova may order the extension of the 3-month term provided for in para. (7) by periods of at most 3 months each, at most 3 times consecutively, if the extension is necessary in order to prevent endangering financial stability or if there is a public interest in ordering the extension, or when a potential acquirer of the shares offered for sale has been identified, without a prior assessment by the National Bank of Moldova, whose suitability and appropriateness is not subject to justified suspicion at the time of adopting the extension decision. The application for the extension of the terms for the sale of the newly issued shares by the bank shall be submitted 10 days before the expiry of the previous term established for the sale of the newly issued shares.

(9) The National Bank of Moldova shall inform the bank and notify the National Commission regarding the extension of the term provided for in para. (8) until the expiry of the previous term established for the sale of the newly issued shares.

(10) The sale of the newly issued shares shall take place on the regulated market or within the multilateral trading system at the initial price established under the conditions of para. (11), which may be subsequently modified under the conditions of para. (13). The newly issued shares are offered for sale only as a single package, consisting of their total number, and are to be acquired by a single buyer or by a group of persons acting in concert.

(11) The initial offering price for sale of the newly issued shares is set within no more than 3 months from the date of expiry of the term granted to the holders of securities for the sale of the shares, under the following conditions:

a) if the quota does not exceed 10% – starting from the value of the shares resulting from the application of one of the criteria provided in Art. 23 para. (2), with the application of para. (7) for the criterion established in Art. 23 para. (2) letter a);

b) if the quota exceeds 10%, for banks with a value of assets not exceeding 5 billion lei – starting from the value of the shares resulting from an evaluation carried out by an independent valuation company;

c) if the quota exceeds 10%, for banks with a value of assets exceeding 5 billion lei – starting from the value of the shares resulting from an evaluation carried out by an entity with a reputation and recognized international experience in the field of valuation of securities of public interest entities and which is not in a conflict of interest with the issuer, which may be a bank, an audit company or a valuation company. The evaluation will be carried out subject to prior notification of the National Bank of Moldova regarding the selected evaluator.

(12) The evaluation of the offering price for sale of the newly issued shares under the conditions established in para. (11) shall be carried out with a periodicity of one year.

(13) During the periods of sale of the newly issued shares indicated in para. (7), (8) and (15), for the feasibility of the transaction, the executive body of the bank may modify the previously established price, providing justifying arguments in the event of the occurrence of factors that significantly influence the price of the shares by updating its evaluation under the conditions of para. (11).

(14) Any modification of the price is notified in advance to the National Bank of Moldova and disclosed to the public at least in the manners established in Art. 16 para. (2) letters a), c) and d).

(15) If, within the term established in para. (7) or within the extension term provided in para. (8), the newly issued shares have not been sold as a single package, the executive body of the bank disposes of the newly issued shares in fractional packages or by other methods, in accordance with the rules of the regulated market or within the multilateral trading system.

(16) The price of the newly issued shares and offered for sale in accordance with para. (15) is established under the conditions of para. (11) if the 1-year term from the establishment of the initial offering price for sale of the newly issued shares has expired, and if the 1-year term has not expired, the sale price remains at the level of the one previously established or is established by the executive body of the bank, at its decision,

by diminishing by the premium related to the single package, which may oscillate within the limit of up to 15 percent relative to the previously established price.

(17) At any stage of sale, the newly issued shares may be purchased only by persons who have obtained the prior approval of the National Bank of Moldova. Investment firms accept clients' orders only after the presentation of this prior approval.

(18) The monetary funds obtained as a result of the sale of the newly issued shares are transferred to a provisional bank account opened by the bank for this purpose. The bank records the monetary funds obtained from the sale of the newly issued shares in the accounts of the former holders, applying the principle of proportionality, after withholding the amounts related to fines applied to the former holders, if these were applied and were not paid, and the expenses related to the sale, including taxes, payments, commissions. The provisions of this paragraph apply without prejudicing the applicability of the provisions of the legislation on the prevention and combating of money laundering and terrorist financing.

(19) Investment firms inform the bank immediately about the clients who have purchased shares.

The bank presents to the National Bank of Moldova the list of persons who have purchased the newly issued shares within 5 days from the expiry of the term provided for the sale.

[Art. 111 introduced by Law no. 273 of 15.12.2017, in force 29.12.2017]

Article 12. Encumbering securities with obligations

(1) Encumbering securities with obligations consists in blocking the securities in the account of the holder of securities for a determined or undetermined period of time, establishing the prohibition to alienate these securities or to carry out other transactions or operations that have or may have as a consequence the transfer of the ownership right over these securities to another person.

(11) The particularities of the use of financial guarantees constituted in the form of securities under financial guarantee contracts without transfer of ownership in accordance with Law no. 184 of 22 July 2016 on financial guarantee contracts are regulated by Art. 11 and 12 of the law mentioned in this paragraph.

(2) The pledge of securities is registered in the Register of movable real guarantees in accordance with the provisions of the Law on pledge. Other rights and encumbrances with obligations of securities are registered in the register of holders of securities.

(3) Encumbering securities with obligations is done on the basis of the pledge contract, the financial guarantee contract, the decision of the National Commission, the court or other competent public authorities.

(4) Encumbering securities with obligations in favor of the creditor does not lead to the creditor obtaining the right to administer the securities or other rights offered by the securities in question.

(5) In the event of non-performance by the pledging debtor of the obligations secured by the pledge, the pledge creditor shall enforce the rights established by the legislation on pledges.

[Art.12 completed by Law no.185 of 22.07.2016, in force 16.03.2017]

[Art.12 amended by Law no.173 of 25.07.2014, in force 08.11.2014]

Section 3 Public offers of securities

Article 13. General provisions on public offer

(1) A public offer may not be carried out without the publication of a prospectus.

(2) The obligation to publish a prospectus does not apply to the following categories of offers:

a) the offer is addressed exclusively to qualified investors; and/or

b) the offer is addressed to fewer than 100 natural or legal persons, other than qualified investors; and/or

c) the offer is addressed to investors who acquire these securities in the amount of the lei equivalent of at least 50000 euro calculated at the official exchange rate of the National Bank of Moldova per investor; and/or

d) the offer in which the nominal value of a security is equal to or greater than the lei equivalent of 50000 euro calculated at the official exchange rate of the National Bank of Moldova;

and/or

e) the offer whose total value, over the course of 12 months, is less than the lei equivalent of 100000 euro calculated at the official exchange rate of the National Bank of Moldova.

(3) A public offer of securities shall be carried out by the following persons:

a) by the issuer – upon the issue of the securities;

b) by the person requesting the admission of the securities to a regulated market or within an MTF – upon the admission of a class of securities to a regulated market or within an MTF;

c) by the person who resells the securities under the conditions specified in para.(4) and (5).

(4) Any resale of securities, including in cases where they previously formed the object of a public offer, shall be considered a separate offer, and the provisions of para.(2) shall be applied accordingly, in order to determine whether this resale is a public offer of securities.

(5) If in the case specified in para.(4) it is determined that the resale of securities is a public offer, the person who resells the securities is obliged to comply with the provisions regarding the public offer established by this law and by the normative acts of the National Commission.

(6) A public offer shall be carried out only through investment firms and accepted persons that are approved by the National Commission to provide financial investment services and activities on the territory of the Republic of Moldova.

Article 14. Prospectus of the public offer

(1) The prospectus of the public offer may be drawn up in the form of a single document or a set of 3 separate documents, and shall contain:

a) information regarding the issuer and the securities offered to the public or to be admitted to trading on a regulated market;

b) all information enabling investors to make an informed assessment of the assets and liabilities, financial position, profit or losses, and prospects of the issuer or of the guarantor of the issue, if any, as well as of the rights attached to these securities;

c) a summary of the prospectus, in accordance with the provisions of para.(2).

(2) The summary of the prospectus of the public offer must set out in a concise form and in non-technical language the essential characteristics and risks relating to the issuer, the guarantor of the issue, if any, and the securities concerned, and must contain a warning that:

a) the summary must be read as an introduction to the prospectus;

b) any decision to invest in these securities must be based on a comprehensive and exhaustive examination of the prospectus;

c) civil liability for damages caused to investors shall rest with the persons who presented the summary, if the summary contains erroneous data and/or does not correspond to the information in other parts of the prospectus.

(3) The prospectus of the public offer shall contain the names and positions of the responsible persons, and in the case of legal persons – their name and registered office and an express statement confirming that the data and information in the prospectus are true and that the prospectus does not contain omissions of information.

(4) The model, form and categories of minimum information that the prospectus of the public offer must contain, as well as the document provided for in art.16 para.(5) shall be established by the normative acts of

the National Commission, taking into account the categories of minimum information to be established depending on:

a) the type of securities that are the object of the offer;

b) the type of public offer (placement, admission to the regulated market, takeover, resale, acquisition);

c) the type of activity and the size of the issuer of the securities that are the object of the offer.

(5) If the final price and number of the securities offered cannot be indicated in the prospectus of the public offer at the time of its approval, the prospectus must necessarily contain:

a) the criteria and/or conditions on the basis of which the final price and number of the securities will be established or, in the case of the price, the maximum price of the securities; or

b) the commitment of the person initiating the offer that the person accepting the purchase or subscription of the securities that are the object of the offer may refuse this purchase or subscription within at least 2 working days from the presentation of the price to the National Commission and its publication under the conditions of art.16 para.(2).

(6) In the case specified in para.(5), the final price and number of the securities shall be presented to the National Commission and, at the same time, shall be published in the manner in which the prospectus of the public offer was previously published in accordance with art.16 para.(2).

(7) The prospectus of the public offer is valid for a term of one year from the date of publication and may be used by the offeror for other public offers of securities of the same class and for admission to a regulated market, provided that the prospectus is completed in accordance with Art. 18.

Article 15. Approval of the prospectus of the public offer

(1) The public offer of securities is carried out by the offeror after the approval of the prospectus of the public offer by the National Commission.

(2) The approval of the prospectus is not a confirmation of the fact that the information included in the prospectus reflects the financial-economic situation of the issuer of the securities offered publicly, does not guarantee the obligations of the offeror or of the issuer and/or does not constitute an evaluation of the investment qualities of the issuer or of the securities offered publicly, but is a finding of the fact that the prospectus of the public offer is complete and corresponds to the requirements regarding its structure and composition.

(3) The National Commission approves or refuses the approval of the prospectus of the public offer within a term of at most 10 working days from the date of submission of the application for approval of the prospectus of the public offer and of all related documents.

(4) The term established in para. (3) is extended up to 20 working days in the case in which the public offer refers to the securities of an issuer whose securities have until that moment not been admitted for trading on a regulated market or which has previously not made a public offer.

(5) Upon the presentation of supplementary information or of new documents at the request of the National Commission or on the initiative of the person initiating the offer, the terms provided in para. (3) and (4) begin to run anew from the date of presentation of these new information and documents by the person initiating the offer.

(6) The National Commission refuses the approval of the prospectus of the public offer in the cases provided in Art. 7 para. (11).

Article 16. Publication of the prospectus of the public offer

(1) After the approval by the National Commission of the prospectus of the public offer, it shall be published by the offeror in the state language no later than the date of opening of the offer.

(2) The prospectus is considered published if it is published:

a) in one or more newspapers with national circulation – in this case, the prospectus is published in full or in the form of a notice indicating the place where the full version of the prospectus is located; or

b) in printed form accessible to the public, free of charge, at the offices of the regulated market to which the securities offered publicly are to be admitted or at the headquarters of the offeror and at the offices of the investment firm that provides intermediation services for the underwriting and/or placement of the securities; or

c) in electronic form on the web page of the offeror and, if applicable, on the web page of the investment firm that provides intermediation services for the underwriting and/or placement of the securities; or

d) in electronic form on the web page of the regulated market to which the securities offered publicly are to be admitted.

(3) Upon the publication of the prospectus in the manner established in para. (2), the National Commission places the prospectus of the public offer in electronic form on its own web page for a term of one year.

(4) In the case in which the prospectus was published in electronic form, a copy on paper support must be offered to any investor at their request, free of charge, by the person who initiated the offer or by the investment firm that provides intermediation services for the underwriting and/or placement of the securities.

(5) The prospectus of the public offer is not drawn up if the offeror makes public a document that contains information equivalent to the information in the prospectus of the public offer, in the case in which:

a) shares issued for the substitution of some previously issued shares are offered, as a result of conversion, splitting or consolidation, provided that this fact does not involve the increase of the share capital;

b) securities that appear as a result of a merger are offered;

c) free of charge the shares are transmitted or are to be transmitted to existing shareholders or the dividends are paid in the form of shares of the same class as the shares that grant the right to these dividends, provided that the published document will contain information also about the number and nature of these shares, as well as about the reasons and conditions of their offering;

d) the securities are transmitted or are to be transmitted to the members of the board, the single-person executive body or the members of the executive body, existing or former, or to employees by their employer, provided that these securities are admitted for trading on a regulated market and the issuer will disclose the information about the number and nature of these securities, as well as about the reasons and conditions of their offering.

(6) The public offer carried out without the approval of the prospectus by the National Commission and/or without its publication in accordance with the requirements of this article is null and entails the liability of the guilty persons and the application of the sanctions provided by this law and by other legislative acts.

Article 17. Advertising of the public offer

(1) Any advertising related to the public offer will clearly indicate:

a) that the prospectus of the public offer has been or is to be published;

b) the place where investors or potential investors can or will be able to obtain the prospectus of the public offer.

(2) In the advertising of the public offer, in accordance with the legislation on advertising:

a) the use of erroneous or misleading information is prohibited;

b) the information in the advertising will be consistent with the information in the prospectus of the public offer.

(3) Any information related to the public offer, presented in written or oral form, including in the cases in which it is not advertising, will be consistent with the information in the prospectus of the public offer.

(4) Any form of advertising of the public offer prior to the approval of the offer prospectus by the National Commission is prohibited.

(5) The National Commission is entitled to verify whether the advertising activities and information comply with the provisions of this law.

(6) Persons who violate the provisions of paragraphs (1)–(4) bear liability in accordance with the legislation in force.

Article 18. Supplement to the public offer prospectus

(1) Any significant new fact, any material error or inaccuracy in the prospectus that may influence the decision of investors or potential investors to subscribe for the securities that are the subject of the public offer, occurring during the period from the approval of the prospectus until the closing of the public offer or, as the case may be, until the commencement of trading on a regulated market, shall be communicated by the offeror by means of a supplement to the prospectus.

(2) The supplement to the prospectus shall be approved by the National Commission within no more than 7 working days from the date of submission of the offeror's application.

(3) Within no more than 3 working days from the date of approval, the offeror shall publish the supplement to the prospectus in the manner in which the prospectus was published.

(4) The person who has accepted the purchase or subscription of the securities prior to the publication of the supplement is entitled to refuse the purchase or subscription thereof within at least 2 days from the date of publication of the supplement.

Article 19. Powers and responsibilities of the National Commission regarding public offers

(1) When approving the prospectus and supervising public offers, the National Commission is entitled:

a) to request the offeror to include additional information in the prospectus, where such information is necessary in order to protect investors;

b) to request additional information and documents both from the offeror and, where the offeror is a legal person, from the shareholders who hold control over the offeror or from the legal persons over which the offeror holds control;

c) to request the offeror's auditor, the persons with management responsibilities or the investment firms through whose intermediation the public offer is carried out to provide information;

d) whenever there are justified grounds, to suspend a public offer, for no more than 10 working days, where the provisions of the normative acts regarding the public offer have been violated;

e) whenever there are justified grounds, to suspend the advertising regarding the public offer, for no more than 10 working days, where the provisions of the normative acts regarding the public offer have been violated;

f) to prohibit a public offer where the National Commission finds that the provisions of the normative acts regarding the public offer have been violated;

g) whenever there are justified grounds, to suspend or to request the operator of a market to suspend the trading of a class of securities, for a period of no more than 10 working days, where the provisions of the normative acts regarding the public offer have been violated;

h) to prohibit the trading of a class of securities where the National Commission finds that the provisions of the normative acts regarding the public offer have been violated;

i) to make public the fact that an issuer does not comply with its obligations towards investors.

(2) Where the securities are admitted to trading on a regulated market, the National Commission is entitled:

a) to require the issuer to disclose all significant information that may affect the price of the securities admitted to trading on the regulated market, in order to ensure the protection of investors or to ensure the proper functioning of the market;

b) to suspend or to request the regulated market to suspend the trading of a class of securities if, in the opinion of the National Commission, the issuer is in a situation where the trading of its securities may be detrimental to the interests of investors.

(3) In the process of examining the prospectuses of public offers and of the controls carried out in connection with the public offer, the National Commission, implicitly the members of the Board of Administration and its collaborators:

a) are obliged to ensure and maintain the confidentiality of information;

b) are not entitled to disclose to any person or authority the information obtained, except in cases where the normative acts provide otherwise.

(4) On the basis of bilateral or multilateral agreements, the National Commission is entitled to provide the information at its disposal regarding public offers and the offeror to the regulatory authorities of capital markets in the member states of the European Union and in other states.

Section 4 Takeover offers

Article 20. General regulations regarding the takeover offer

(1) A takeover offer may be:

a) voluntary – where the offeror, not having this obligation, addresses a takeover offer regarding the purchase of a number of voting securities of an issuer, which seeks or has as its objective the acquisition of more than 50% of the total number of these securities;

b) mandatory – in the case specified in Art. 21 paragraph (1).

(2) A takeover offer may be initiated only in respect of securities issued by public interest entities.

(3) A takeover offer may not be carried out by the issuer in respect of its own securities.

(4) A takeover offer does not apply in the case of fund units and shares issued by UCITS.

(5) A takeover offer may be carried out both by the shareholders of the company whose securities constitute the object of the offer and by persons who are not shareholders of the company in question.

(6) The conditions of the takeover offer must be equal for all holders of securities that constitute the object of the offer.

(7) The duration of the takeover offer may not be less than 2 weeks and may not exceed 10 weeks, except in the cases provided for in paragraph (10).

(8) The takeover offer may be made by the offeror through one or more investment companies.

(9) The manner and procedures for carrying out takeover offers, offers to purchase and withdrawal of securities held by minority shareholders are regulated in the normative acts of the National Commission.

(10) The duration of the offer may be extended up to 60 days from the date of submission to the National Commission of the request to amend the term in cases where the issuer whose securities are the object of the offer convenes the general meeting of shareholders to examine the offer.

[Art.20 amended by Law no.180 of 25.07.2014, in force 15.08.2014]

Article 21. Mandatory takeover offer

(1) The natural or legal person who holds, directly or indirectly, alone or together with persons acting in concert with it, more than 50% of the voting securities of a company or of the securities that can be converted or offer the right to acquire voting securities is obliged to make a takeover offer regarding the purchase at a fair price of the securities of the same class held by other persons.

(2) The legal person who holds, directly or indirectly, more than 50% of all voting securities of an issuer shall be obliged to initiate a mandatory takeover offer each time its founders (associates or shareholders) change who, together with the persons with whom they act in concert, hold the majority of voting rights in this legal person.

(3) The mandatory takeover offer is addressed by the offeror as soon as possible, but no later than 3 months from the date of acquisition of the securities by the person mentioned in paragraph (1) and

(2) or by the persons acting in concert. The 3-month term begins to run from the date on which the person obliged to make the mandatory takeover offer is registered in the register of securities holders with the holding of securities that determines the offer obligation and is considered fulfilled on the first day of the offer's conduct.

(4) If, after addressing the offer and before its expiry, the offeror or the person acting in concert buys securities at a price higher than the offer price, the offeror is obliged to apply a price at least equal to the highest price.

(5) In the case specified in paragraph (4), the new price shall also apply to the counter-offers for sale submitted by the holders of securities to whom the takeover offer is addressed.

(6) The obligation to make the takeover offer, established in paragraphs (1) and (2), does not arise in the case where the holding of more than 50% of the securities occurred as a result of a voluntary takeover offer regarding the purchase of all securities of the respective class.

Article 22. Competitive takeover offers

(1) Any person, except the issuer, may announce a competitive takeover offer to the voluntary takeover offer, having as object the same securities, under the following conditions:

a) the object of the competitive takeover offer constitutes at least the same number of securities and/or the purpose of the offer is to reach the same share in the share capital; and

b) the proposed price is higher than the price proposed in the first offer.

(2) If after the registration of the first takeover offer with the National Commission other offers are submitted that meet the criteria of a competitive offer, the price at which the offer is to be made is determined by the auction method, in the manner established by the normative acts of the National Commission.

(3) Competitive takeover offers may be submitted for registration to the National Commission within 10 working days from the date of publication in the Official Gazette of the Republic of Moldova of the decision of the National Commission by which the first offer was registered.

(4) If several offerors offer the same price, the closing term of the offers shall be the same for all offers and shall not exceed 10 weeks from the date of announcement of the first offer.

Article 23. Fair price

(1) The fair price is the price equal to at least:

a) the highest price paid by the offeror or by the persons with whom it acts in concert within 12 months prior to the offer; or

b) the weighted average trading price on the regulated market for the last 6 months prior to the offer, if the provisions of letter a) cannot be applied.

(2) If the provisions of paragraph (1) cannot be applied, the offered price is determined in accordance with the regulations of the National Commission, taking into account at least the following criteria:

a) the weighted average trading price for the last 12 months prior to the conduct of the offer;

b) the value of net assets per share of the company, according to the latest audited financial statement;

c) the value of the shares resulting from an appraisal, carried out by an independent evaluator, in accordance with international valuation standards.

(3) The determination of the price according to paragraph (2) letter c) is carried out by a person qualified in the field of valuation, registered in the register of authorized persons kept by the National Commission in the manner established by it.

(4) If the person/persons obliged to conduct the mandatory takeover offer do not initiate the offer in question within the term provided in art. 21 para. (3), but at a later date, the fair price shall be determined in accordance with the substantive rules specified in para. (1) and (2), by reference either to the moment at which the mandatory takeover offer should have been initiated, or to the moment at which the mandatory takeover offer was effectively initiated, the offer price being the highest price obtained by reference to either of the two moments.

(5) The fair price shall be mandatorily applied in the following cases:

a) when carrying out the takeover offer;

b) upon mandatory withdrawal, in accordance with art. 30;

c) upon mandatory acquisition, carried out in accordance with art. 31.

(6) The National Commission is entitled to request the application of a new price when the price was formed as a result of:

a) non-compliance with the provisions of para. (1) and (2);

b) manipulation activities.

(7) The transaction volumes for determining the fair price, in the cases specified in para. (1), shall be the following:

a) in the case of trading the shares of an issuer with a share capital of up to 5 million lei inclusive, the price in the formation of which at least 5% of the number of shares issued of the given class participated shall be taken into account;

b) in the case of trading the shares of an issuer with a share capital of from 5 to 10 million lei inclusive, the price in the formation of which at least 3% of the number of shares issued of the given class participated shall be taken into account;

c) in the case of trading the shares of an issuer with a share capital of from 10 to 25 million lei inclusive, the price in the formation of which at least 1% of the number of shares issued of the given class participated shall be taken into account;

d) in the case of trading the shares of an issuer with a share capital of from 25 to 50 million lei inclusive, the price in the formation of which at least 0.5% of the number of shares issued of the given class participated shall be taken into account;

e) in the case of trading the shares of an issuer with a share capital greater than 50 million lei, the price in the formation of which at least 0.1% of the number of shares issued of the given class participated shall be taken into account.

Article 24. Information on the takeover offer and approval of the prospectus

(1) Within at most 3 working days from the date of approval of the prospectus regarding the carrying out of the takeover offer, the offeror shall publish in one or more newspapers with national circulation and shall present to the issuer whose securities constitute the object of the offer, to the regulated market and to the MTF, within whose framework these securities are admitted to trading, a notice regarding the intention to carry out the takeover offer.

(2) After the publication of the notice by the offeror, the issuer whose securities constitute the object of the offer shall inform its employees about the takeover offer initiated by the offeror. If the offeror is a legal person, it shall inform its employees about the takeover offer.

(3) The offer prospectus must contain the following information:

a) the conditions of the offer;

b) the name of the offeror, in the case of a natural person, or the full name and legal address, in the case of a legal person;

c) the securities that are the object of the offer or, as the case may be, the class or classes of securities that constitute the object of the offer;

d) the price offered for one security and the manner of its determination;

e) the percentage or the maximum and minimum number of securities that constitute the object of the offer;

f) complete data regarding the number of securities of the same class held by the offeror and by the persons acting in concert;

g) the conditions that must be met by counter-offers from the holders of securities that constitute the object of the offer;

h) the offeror's intentions regarding the subsequent activity of the issuer whose securities constitute the object of the offer and, to the extent that it is affected by the offer, of the offeror that is a legal person, including information regarding the maintenance of jobs of employees and of management bodies, changes in working conditions, strategic plans and possible effects on employment and on the company's place of activity;

i) the duration of the takeover offer;

j) data regarding the financing of the offer;

k) data regarding the identity of the persons acting in concert with the offeror or with the issuer whose securities constitute the object of the offer, the legal address, in the case of a legal person, as well as their relations with the offeror and, if any, with the issuer in question;

l) references to the legislation that will apply to the conclusion of contracts between the offeror and the holders of securities who have accepted the offer, as well as to the competent court to examine any disputes.

(4) The National Commission shall approve or refuse to approve the offer prospectus within at most 7 working days from the date of submission of the application by the offeror, with the annexation of all documents, including the prospectus and the documents confirming the capacity to finance the offer.

(5) The National Commission shall refuse to approve the prospectus in the cases provided in art. 7 para. (11), as well as in the case in which the price offered by the offeror does not correspond to the price requirements established in art. 23 para. (1) and (2).

Article 25. Publication of the prospectus and advertising of the takeover offer

(1) After approval by the National Commission, the prospectus of the takeover offer shall be published by the offeror no later than 7 working days from the date of approval.

(2) The prospectus shall be published under the conditions of art. 16 para. (2).

(3) Upon publication of the prospectus in accordance with para. (2), the National Commission shall place the prospectus of the takeover offer in electronic form on its own web page for the duration of the takeover offer.

(4) Within no more than 7 days from the date of expiry of the duration of the takeover offer, the offeror shall publish, in the same means of information in which it published the prospectus of the takeover offer, a notice regarding the results of the takeover offer, which shall contain detailed information regarding the number of securities of the same class held by the offeror and the persons with whom it acts in concert after the conduct of the takeover offer.

(5) The provisions of Art. 17 shall apply accordingly to the publicity of takeover offers.

Article 26. Amendment of the takeover offer

(1) The offeror shall be entitled to amend the conditions of the takeover offer, applying for this purpose a supplement to the offer prospectus.

(2) The supplement to the prospectus of the takeover offer shall be approved by the National Commission within no more than 7 working days from the date of submission of the offeror's application.

(3) Within no more than 3 working days from the date of approval, the offeror shall publish the supplement to the prospectus at least in the manner in which the prospectus was published.

(4) The offeror shall be entitled to amend the conditions of the offer with respect to:

a) the price offered for one security;

b) the amount of funds necessary for the acquisition of the securities that constitute the object of the offer and the methods of payment thereof to the holders of securities who accept the offer;

c) the information regarding the number of securities of the same class held by the offeror and the persons with whom it acts in concert;

d) the place where the holders of securities that constitute the object of the offer will submit their counteroffers;

e) the duration of the takeover offer;

f) the name or designation of the persons who act in concert with the offeror, the legal address, in the case of a legal person, as well as regarding their relations with the offeror and, if any, with the issuer whose securities constitute the object of the offer;

g) the information regarding the investment company through whose intermediation the takeover offer is carried out.

(5) The offeror shall amend the conditions of the offer in compliance with the following requirements:

a) the amendment of the duration of the takeover offer cannot lead to exceeding the maximum term established in Art. 20 para. (7);

b) the duration of the takeover offer cannot be reduced;

c) the price established for the purchase of one security cannot be reduced;

d) the amendments to the offer cannot be published later than 2 weeks before the expiry of the duration of the takeover offer.

Article 27. Revocation of the takeover offer

(1) The holder of securities who has submitted the proposal for the sale of securities shall be entitled to revoke it during the duration of the takeover offer.

(2) If during the duration of the voluntary takeover offer counteroffers for the sale of a number of securities equal to or greater than that indicated in the offer have been submitted, the offeror shall be obliged to acquire them in a number not less than that indicated in the offer, satisfying these proposals in full or on a proportional basis.

(3) If during the duration of the voluntary takeover offer counteroffers for the sale of a number of securities less than that indicated in the offer have been submitted, the offeror shall be entitled to refuse the performance of the obligations deriving from the takeover offer or to purchase all the respective securities, satisfying the mentioned counteroffers.

(4) The offeror shall not be entitled to refuse the performance of the obligations deriving from the mandatory takeover offer, including in the case where counteroffers for the sale of a number of securities less than that indicated in the offer have been submitted.

Article 28. Responsibilities of the issuer in the case of a takeover offer

(1) During the conduct of the takeover offer, the offeror and the board of the company issuing the securities that constitute the object of the takeover offer shall be obliged:

a) to inform the employees regarding the offer under the conditions of Art. 24 para. (2);

b) to provide to the holders of securities that constitute the object of the offer, at their request, a notice regarding the possible effects on the number of jobs, on employments and on the place of activity of the issuer;

c) to convene the general meeting of shareholders and to obtain the authorization of the general meeting in the case where the board takes decisions that could lead to the frustration of the offer.

(2) After the publication by the offeror of the offer prospectus, the board of the company issuing the securities shall draft and make public a notice regarding the takeover offer, which in a reasoned manner shall express the issuer's opinion on the possible effects of the offer on the interests of the issuer as a whole, in particular on the number of jobs of the employees and management bodies, the change

of working conditions, strategic plans and the possible effects on employments and the place of activity of the companies, having regard to the provisions of the offer prospectus referring to the information specified in Art. 24 para. (3) letter h).

(3) In the case where the board of the company issuing the securities receives from the employees' representatives a different notice regarding the possible effect of the offer on the jobs of the issuer, this notice shall be annexed to the notice issued by the board.

(4) The issuer shall communicate in writing the notice specified in para. (2) to the employees' representatives, and in the absence thereof – to the employees themselves.

(5) The issuer may request the authorization of the general meeting of shareholders in any case.

Article 29. Nullity of restrictions

(1) During the duration of the takeover offer, in relation to the offeror, the restrictions regarding the transfer of the right of ownership over the securities that constitute the object of the offer, provided by:

a) the articles of incorporation of the issuer of securities that constitute the object of the offer;

b) the agreements between the issuer of securities that constitute the object of the offer and the holders of these securities.

(2) During the takeover offer, with respect to the authorization decisions approved by the general meeting of shareholders under the conditions of Art. 28 para. (1) letter c), the restrictions on the right to vote provided by:

a) the articles of incorporation of the issuer of securities that constitute the object of the offer;

b) the agreements between the issuer of securities that constitute the object of the offer and the holders of these securities.

(3) If, following a takeover offer, the offeror holds 75% of the securities that constituted the object of the offer, the restrictions on the transfer of ownership over these securities, the restrictions on the exercise of the right to vote, as well as on the extraordinary rights of shareholders regarding the appointment and revocation of the members of the board or of the executive body shall not apply.

Article 30. Request for mandatory withdrawal

(1) Holders of voting securities, except those provided for in para. (6), are obliged to sell at a fair price to the offeror, at the latter's request, the securities held if, after the conduct of a mandatory or voluntary takeover offer, the offeror holds alone or together with persons acting in concert at least 90% of the securities that constitute the object of the offer.

(2) The provisions of para. (1) do not apply to securities issued by commercial banks, insurance companies and UCITS.

(3) The offeror is entitled to address a request for mandatory withdrawal within a term of at most 3 months from the expiry of the duration of the takeover offer. Upon the expiry of the 3-month term, the offeror loses the right to request mandatory withdrawal until the conduct of a new takeover offer.

(4) The request for mandatory withdrawal shall be sent to the minority shareholders, shall be published by the offeror in the same means of information in which the prospectus of the takeover offer was published and shall contain the following information:

a) regarding the securities that are the object of the request for mandatory withdrawal;

b) the name of the offeror, in the case of a natural person, or the full name and legal address, in the case of a legal person, as well as detailed information regarding the number of securities of the same class held by the offeror and the persons with whom it acts in concert;

c) the express reference to the fact that the offeror addresses a request for mandatory buyback, on the basis of which the other holders are obliged to sell to it the securities of the same class that they hold;

d) regarding the conditions for acquiring the securities, including the price offered for one security and the manner of its determination;

e) confirmation of the existence of the necessary means of payment for the acquisition of the securities that constitute the object of the request, the modalities of their payment to the holders of securities;

f) regarding the place and manner in which the holders of securities shall address the offeror for the purpose of transferring the securities;

g) regarding the duration of the request for mandatory withdrawal;

h) regarding the right of shareholders to refuse the transfer of shares, in accordance with the provisions of para. (6).

(5) The duration of the request for mandatory withdrawal cannot be less than 4 weeks and cannot exceed 8 weeks.

(6) Shareholders who do not wish to transfer their shares are entitled to communicate this to the offeror in writing until the expiry of the term established in the request for mandatory withdrawal sent to the minority shareholders.

(7) If, during the duration of the request for mandatory withdrawal, the shareholder does not submit to the offeror the request for refusal or transfer of its shares, it is considered that it has tacitly accepted the offeror's request.

(8) Within a term of at most 2 weeks after the expiry of the duration of the request for mandatory withdrawal, if the holders of securities to whom the request for mandatory withdrawal was addressed have not sold to the offeror the securities they hold and have not submitted the request in accordance with para. (6), the offeror is entitled to request the person who keeps the register of holders of securities that constitute the object of the request for mandatory withdrawal to remove the securities from the account of the holders of securities and to transfer these securities to its own account.

(9) In the case specified in para. (8):

a) the offeror, until addressing the respective request to the person who keeps the register of holders of securities, is obliged to open a current bank account in the name of the holder of securities and to transfer the necessary monetary funds for the acquisition of the securities;

b) the person who keeps the register of holders of securities is obliged to transmit the ownership right over the securities from the holders of securities to the offeror within a term of at most 2 days from the date when the offeror presented information confirming the transfer of the necessary monetary funds to the account of the holder of securities; the transmission of the ownership right shall be effected on the basis of the transfer instruction, signed unilaterally by the offeror.

(10) Upon the sale of securities as a result of a request for mandatory withdrawal in accordance with para. (1), the fair price is determined by the offeror in accordance with Art. 23 and is indicated in the request for mandatory withdrawal.

[Art. 30 amended by Law no. 33 of 16.03.2018, in force 06.04.2018]

Article 31. Request for mandatory acquisition

(1) If, after the conduct of a mandatory or voluntary takeover offer, the offeror holds alone or together with persons acting in concert at least 90% of the securities that constituted the object of the offer, the offeror is obliged to acquire at a fair price the securities of the same class of other holders, at their request.

(2) Holders of securities have the right to submit a mandatory purchase request within at most 3 months from the expiry of the duration of the takeover offer made by the offeror. Upon expiry of the 3-month term, the holders of securities lose the right to request the mandatory purchase until a new takeover offer is carried out by the offeror or after the annual general meeting of shareholders is held under the conditions of paragraphs (5)–(7).

(3) If after carrying out a mandatory or voluntary takeover offer the offeror holds at least 90% of the securities that constitute the object of the offer, the notice regarding the results of the takeover offer, in addition to the information specified in Art. 25 paragraph (4), shall contain:

a) the reference to the fact that other holders of securities of the same class have the right to submit to the offeror a mandatory purchase request;

b) the period until which other holders of securities of the same class have the right to submit to the offeror a mandatory purchase request, in compliance with the requirement established in paragraph (2);

c) the price at which the mandatory purchase of the securities will be carried out;

d) the place where the mandatory purchase requests will be received;

e) the manner and term for making the payments for the purchase of the securities.

(4) The offeror is obliged to purchase the securities of other holders within at most 2 weeks from the date of registration of the mandatory purchase request of the holder of securities.

(5) The mandatory purchase request may be submitted by the shareholders annually, within 30 days from the date of holding the annual general meeting of shareholders.

(6) The purchase price of the shares shall be equal to the highest price among:

a) the market value of the shares;

b) the weighted average trading price of the shares in the last 12 months prior to the date of holding the annual general meeting;

c) the value of net assets per share, according to the latest audited financial statement of the issuer;

d) the nominal value;

e) the price offered in the last takeover offer carried out during the last 2 years.

The price according to items a), b) and e) shall be applied only if it can be determined.

(7) The shares shall be purchased, as a rule, by the person holding the largest number of shares in the group of persons acting in concert, if this group of persons does not decide otherwise.

Article 32. Making the payments

(1) Until the carrying out of the takeover offer, the offeror is obliged to have the necessary means of payment for financing the offer.

(2) As proof of ensuring the existence of the necessary means of payment for financing the offer may serve, separately or in combination:

a) own monetary means;

b) the monetary means of the guarantor;

c) the bank guarantee;

d) the guarantee insurance policy.

(3) When purchasing securities as a result of mandatory withdrawal requests and mandatory purchase requests, the offeror shall use only monetary means as a means of payment.

(4) In the case of takeover offers, the offeror shall make the payments for the purchase of the securities within at most 2 weeks from the expiry of the duration of the takeover offer.

(5) In the case of a mandatory withdrawal request in accordance with the provisions of Art. 30, the offeror shall make the payments for the purchase of the securities within at most 2 weeks from the date of expiry of the duration of the mandatory withdrawal request.

(6) In the case of a mandatory purchase request in accordance with the provisions of Art. 31, the offeror shall make the payments for the purchase of the securities within at most 2 weeks from the date of submission by the holder of securities of the mandatory purchase request.

(7) Any payments related to the transfer of monetary means for the purchase of securities and other expenses related to the preparation and carrying out of takeover offers, mandatory withdrawal requests and mandatory purchase requests shall be made by the offeror.

Chapter III INVESTMENT FIRMS Section 1 General provisions regarding investment services and activities

Article 33. Types of investment services and activities

(1) Investment firms have the right to carry out the following investment services and activities:

a) reception and transmission of orders regarding one or more financial instruments;

b) execution of orders regarding financial instruments on behalf of clients;

c) dealing on own account;

d) portfolio management;

e) investment advice;

f) underwriting of financial instruments and/or placing of financial instruments on the basis of a firm commitment;

g) placing of financial instruments without a firm commitment;

h) operation of an MTF.

(2) In addition to the investment services and activities listed in paragraph (1), investment firms may provide the following ancillary services:

a) safekeeping and administration of investments;

b) granting of credit or loan to a client to allow them to carry out a transaction with one or more financial instruments, in which the investment firm granting the credit or loan is involved;

c) advice given to joint-stock companies regarding capital structure, industrial strategy and related aspects, services related to mergers and acquisitions of companies;

d) foreign exchange operations, where these operations are directly related to the provision of investment services;

e) investment research and financial analysis or any other form of general recommendation regarding transactions with financial instruments;

f) services related to the underwriting of financial instruments;

g) investment services and activities, as well as the ancillary services mentioned in paragraph (1) items a)–f)

and to paragraph (2) regarding derivative instruments, if these are related to the provision of investment services or ancillary services.

(3) Investment services and activities in respect of financial instruments may be carried out only by:

a) investment firms, under the license issued by the National Commission;

b) accepted persons, under the approval by the National Commission.

(4) Investment services and activities are carried out by the investment firm on an exclusive basis, with the exception of commercial banks.

(5) The foreign exchange operations referred to in paragraph (2) letter d) are carried out by the investment firm, in compliance with the provisions of the legislation in force.

(6) Investment firms are entitled to provide investment services and activities to clients falling under the Cooperation Agreement between the Government of the Republic of Moldova and the Government of the United States of America to Facilitate the Implementation of the Provisions of the Act on the Fulfillment of Tax Obligations with Respect to Foreign Accounts (FATCA) only if they are registered in

the Internal Revenue Service system of the United States of America, have obtained the global intermediary identification number in accordance with the provisions of the Cooperation Agreement between the Government of the Republic of Moldova and the Government of the United States of America to Facilitate the Implementation of the Provisions of the Act on the Fulfillment of Tax Obligations with Respect to Foreign Accounts (FATCA)

and comply with the requirements established in this agreement.

(7) The activities of the investment firm related to the processing of personal data are carried out in accordance with the provisions of Law No. 133 of 8 July 2011 on the protection of personal data.

[Art.33 supplemented by Law No. 241 of 29.12.2015, in force 29.01.2016]

Article 34. Regulation of investment services and activities The investment services and activities listed in Art. 33 are regulated by the normative acts of the National Commission.

Section 2 Requirements regarding the conduct of activity

Article 35. Investment firm license

(1) 3 categories of investment firm licenses may be issued:

a) the category A license allows the investment firm to carry out the services and activities established in Art. 33 paragraph (1) letters a), b), d) and e) and in paragraph (2) letters c) and e). The category A license prohibits trading in financial instruments on own account and underwriting intermediation within issues of financial instruments;

b) the category B license allows the investment firm to carry out the services and activities established in Art. 33 paragraph (1) letters a), b), d), e) and g) and in paragraph (2) letters a), c), d) and e). The category B license prohibits trading in financial instruments on own account and underwriting intermediation within issues of financial instruments based on a firm commitment;

c) the category C license allows investment firms to carry out all the services and activities established in Art. 33 paragraphs (1) and (2).

(2) To obtain an investment firm license, the applicant submits to the National Commission an application to that effect, to which it attaches documents confirming that the applicant cumulatively meets the following requirements:

a) has the legal organizational form of a joint-stock company, legally constituted and registered in the Republic of Moldova;

b) meets the capital adequacy requirements established by this law;

c) has a business program, approved by decision of the applicant's competent body, which contains the organizational structure of the company, the types of investment services and activities, the decision-making procedure, internal rules of organization and provision of services and other aspects regarding the planned activities;

d) the persons who manage the applicant's activity meet the requirements established by this law;

e) the persons with qualified holdings in the applicant's capital are approved by the National Commission in accordance with the provisions of Art. 40 paragraph (19);

f) the applicant declares its commitment to become a member of the Investor Compensation Fund within no more than 30 days from the date of obtaining the license.

(3) The investment firm license shall expressly contain the investment services and activities and ancillary services carried out by the investment firm.

(4) Investment firms holding a category B license may hold financial instruments on own account if the following conditions are cumulatively met:

a) these holdings appear as a result of an error of the investment firm regarding the execution of client orders;

b) the market value of these holdings does not exceed 15% of the company's own capital;

c) the capital adequacy requirements established by this law and by the normative acts of the National Commission are met;

d) these holdings are accidental and temporary in nature and are strictly limited to the time necessary to carry out the transactions that caused the holdings to appear.

(5) The investment of own assets in financial instruments is not considered an activity carried out by the investment firm in accordance with paragraph (1) if the purpose of trading them frequently and systematically is not pursued.

Article 36. Accepted persons

(1) Foreign legal persons authorized to carry out investment services and activities and supervised by the competent authorities of the member states of the European Union, under the agreements concluded between these authorities and the National Commission, are considered accepted persons and do not require an investment firm license.

(2) Accepted persons carry out activity on the territory of the Republic of Moldova through branches registered in the Republic of Moldova.

(3) Persons authorized to carry out investment services and activities and supervised by the competent authorities of the member states of the European Union acquire the status of accepted persons after approval by the National Commission.

(4) In order to obtain the status of accepted person, the applicant submits to the National Commission an application to that effect, to which it attaches the documents confirming that the applicant holds the respective authorizations issued by the competent authorities of the member states of the European Union.

(5) Until a decision is taken regarding approval as an accepted person, the National Commission is entitled to contact the competent authority in the member state of the European Union in order to request an opinion, a confirmation or information regarding the person that has applied to obtain the status of accepted person.

(6) The National Commission approves the applicant's status of accepted person within no more than 3 months from the date of submission of the application to that effect.

(7) Upon approval of the status of accepted person, the National Commission includes the respective information in the Register of accepted persons, kept by the National Commission.

(8) The decision regarding approval of the status of accepted person shall expressly provide the investment services and activities that may be carried out by the person concerned.

(9) Accepted persons are entitled to carry out the investment services and activities provided for by this law within the limits of those indicated in the authorization issued by the competent authority of the member state of the European Union.

(10) The provisions of art.140 para.(5)–(12) apply accordingly to accepted persons upon the granting and withdrawal of the status of accepted person.

(11) The National Commission is entitled to withdraw or suspend, for a period of 90 days, for remediation, the status of accepted person in the case where the person concerned:

a) has not begun to provide the investment services indicated in the decision of the National Commission regarding the granting of the status of accepted person within one year from the adoption of that decision or has not provided any of the investment services indicated in the decision during 6 months;

b) has not paid the fee provided for in art.140 para.(9);

c) has not become a member of the Investor Compensation Fund within the period established by this law;

d) expressly requests the National Commission to withdraw the status of accepted person;

e) has obtained the status of accepted person by providing false information or through other illegal measures;

f) seriously and systematically violates the provisions of this law and of the decisions of the National Commission regarding investment companies and investment services and activities;

g) has had withdrawn or suspended the authorization issued by the competent authority in the member state of the European Union.

(12) The National Commission informs the competent authority in the member state of the European Union regarding the granting, suspension or withdrawal of the status of accepted person.

(13) The National Commission exercises its regulatory, supervisory and control powers in relation to accepted persons in order to ensure that their activity complies with the legislation.

(14) The National Commission is not entitled to establish for accepted persons discriminatory requirements in relation to investment companies licensed in accordance with art.35.

Article 37. The delegated agent

(1) A delegated agent is the natural or legal person that acts in the name and/or in the interest of a single investment company and that promotes to clients or potential clients the services provided by the investment company, receives and transmits instructions or orders from clients regarding financial instruments or investment services, places financial instruments and offers clients or potential clients advisory services regarding these instruments or services.

(2) In order to obtain the status of delegated agent, the applicant submits to the National Commission an application to that effect and a recommendation from the investment company in whose name and/or interest it will act.

(3) The National Commission approves, by decision, the person's status of delegated agent within no more than 15 days from the submission of an application to that effect.

(4) The fee for obtaining the status of delegated agent is 1000 lei, which is paid into the budget of the National Commission by the delegated agent within no more than 10 days from the date of approval of the decision granting the status of delegated agent.

(5) Upon approval of the status of delegated agent, the National Commission includes the information regarding the person concerned in the Register of delegated agents, kept by the National Commission.

(6) The National Commission refuses to grant the status of delegated agent if at least one of the following circumstances exists:

a) in the last 5 years this person has had the status of delegated agent withdrawn as a result of non-compliance with the provisions of the legislation and of the normative acts of the National Commission;

b) the recommendation submitted by the applicant is issued by an investment company that in the last 5 years has issued 3 similar recommendations for persons whose status of delegated agent was subsequently withdrawn for non-compliance with the provisions of this law and of the normative acts of the National Commission.

(7) The status of delegated agent is approved for an unlimited period.

(8) The status of delegated agent is withdrawn by decision of the National Commission in the following cases:

a) the delegated agent violates the provisions of this law and of the normative acts of the National Commission;

b) the person has not acted as a delegated agent for 12 consecutive months;

c) at the request of the delegated agent or of the investment company that contracted the delegated agent.

Article 38. Capital adequacy The initial capital of an investment company, represented by its own capital, shall constitute at least:

a) for holding a category A license: the lei equivalent of 8000 euro calculated at the official exchange rate of the National Bank of Moldova one year after the date of entry into force of this law;

the lei equivalent of 18000 euro calculated at the official exchange rate of the National Bank of Moldova 3 years after the date of entry into force of this law; the lei equivalent of 25000 euro calculated at the

official exchange rate of the National Bank of Moldova 5 years after the date of entry into force of this law;

the lei equivalent of 38000 euro calculated at the official exchange rate of the National Bank of Moldova 7 years after the date of entry into force of this law; the lei equivalent of 50000 euro calculated at the official exchange rate of the National Bank of Moldova 10 years after the date of entry into force of this law;

b) for holding a category B license: the lei equivalent of 19000 euro calculated at the official exchange rate of the National Bank of Moldova one year after the date of entry into force of this law;

the lei equivalent of 44000 euro calculated at the official exchange rate of the National Bank of Moldova 3 years after the date of entry into force of this law; the lei equivalent of 63000 euro calculated at the official exchange rate of the National Bank of Moldova 5 years after the date of entry into force of this law;

the lei equivalent of 94000 euro calculated at the official exchange rate of the National Bank of Moldova 7 years after the date of entry into force of this law; the lei equivalent of 125000 euro calculated at the official exchange rate of the National Bank of Moldova 10 years after the date of entry into force of this law;

c) for holding a category C license: the lei equivalent of 100000 euro calculated at the official exchange rate of the National Bank of Moldova one year after the date of entry into force of this law;

the lei equivalent of 150000 euro calculated at the official exchange rate of the National Bank of Moldova 3 years after the date of entry into force of this law; the lei equivalent of 200000 euro calculated at the official exchange rate of the National Bank of Moldova 5 years after the date of entry into force of this law;

the lei equivalent of 250000 euro calculated at the official exchange rate of the National Bank of Moldova 7 years after the date of entry into force of this law; the lei equivalent of 300000 euro calculated at the official exchange rate of the National Bank of Moldova 10 years after the date of entry into force of this law.

[Art.38 amended by Law no.33 of 16.03.2018, in force 06.04.2018]

Article 39. Requirements for persons who manage the activity of the investment company

(1) Persons who effectively manage the activity of the investment company must cumulatively meet the following requirements:

a) enjoy a good reputation in order to ensure stable and prudent management of the investment company and, if applicable, of any delegated agent;

b) have completed higher education and professional experience in the economic, financial-banking, capital market or asset management (fiduciary management) field;

c) not have valid sanctions, applied by the National Commission, the National Bank of Moldova or by a similar body from abroad, prohibiting or suspending the person's right to operate on the capital or banking market;

d) not have been convicted by a final judgment for offenses related to the activity carried out or for acts of corruption, money laundering, offenses against patrimony, for abuse, taking or giving bribes, forgery and use of forgery, embezzlement of funds, tax evasion or other acts likely to lead to the conclusion that the necessary premises for ensuring sound and prudent management of the investment company are not created;

e) not hold qualified participations in another investment company or in a non-affiliated bank licensed by the National Commission to provide investment services and activities;

f) hold the qualification certificate issued by the National Commission.

(2) The investment company is managed by at least two persons who meet the requirements established in para.(1).

(3) When submitting the application for obtaining the license for activity on the capital market, the applicant presents to the National Commission documents confirming that at least two persons who will manage its activity meet the requirements established in para.(1).

(4) The investment company is obliged to immediately inform the National Commission about changes in the composition of the management bodies and about the appearance of new persons who manage the company, attaching information confirming that the new persons meet the requirements established in para.(1).

(5) If it considers that there are objective and demonstrable grounds that the persons who manage the activity of the investment company might not ensure correct and prudent management of the company, the National Commission applies one of the following measures:

a) refuses the application for issuing the investment company license, if within the term established by the National Commission no measures for compliance have been undertaken;

b) suspends the investment company license previously granted, if within the term established by the National Commission no measures for compliance have been undertaken.

(6) The persons who manage the activity of the investment company will ensure and supervise compliance with the provisions of this law, being obliged:

a) to periodically verify and evaluate compliance with the prudent management requirements established in section 3 of this chapter;

b) to adopt the necessary measures for compliance of the investment company's activity with the provisions of this law;

c) annually, to receive from the persons specified in section 3 of this chapter the written reports and to undertake the corresponding measures deriving from these reports;

d) to present to the company's council written reports regarding the activity of the investment company and the fulfillment of the prudential administration requirements established in section 3 of this chapter.

Article 40. Requirements for persons with qualified holdings

(1) The potential buyer is obliged, until the acquisition of shares placed by investment companies, to notify the National Commission of the acquisition project if:

a) intends to obtain a qualified holding;

b) intends to increase the holding up to a share equal to or greater than 20%, 30% or 50% of the share capital.

(2) Any natural or legal person who, directly or indirectly, alone or together with persons acting in concert who intend to transfer the shares held in the investment company is obliged to notify the National Commission of this fact until the respective transaction is carried out if:

a) intends to transfer a qualified holding;

b) intends to reduce the holding to a share lower than 20%, 30% or 50% of the share capital.

(3) The notification sent to the National Commission according to para.(1) by the potential buyer will contain:

a) the name, in the case of a natural person, or the full name and legal address, in the case of a legal person;

b) the share held by the person in question, alone or together with persons acting in concert, at the time of notification to the National Commission;

c) the share that the person in question intends to transact;

d) documents confirming the identity of the potential buyer;

e) the report on economic financial indicators in the last 3 years, in the case of legal persons;

f) the intentions of the potential buyer regarding the types of services and activities that the investment company will carry out;

g) the intentions of the potential buyer regarding the modification of internal prudential and organizational requirements, as well as regarding internal control and audit requirements;

h) the intentions of the potential buyer regarding the persons who manage the activity of the investment company;

i) information regarding the reputation and experience of the persons who will manage the activity of the investment company, if the potential buyer intends to change the persons who manage the activity of the investment company.

(4) The notification sent, according to para.(2), to the National Commission by the potential seller will contain the information specified in para.(3) lit.a)–c) and the name/full name of the potential buyer, as the case may be.

(5) Within at most 3 working days from receiving the notifications specified in para.(1), the National Commission sends to the potential buyer a confirmation of receipt of the notification.

(6) Within at most 60 working days from the date of sending the confirmation (hereinafter – evaluation term), the National Commission evaluates the documents submitted by the potential buyer and assesses it according to the criteria established in para.(19).

(7) The confirmation of receipt of the notification will also contain the date of expiry of the evaluation term.

(8) During the evaluation term, but no later than the 50th working day within this term, the National Commission is entitled to request, in writing, additional documents and information necessary to finalize the evaluation if the submitted documents contain erroneous or incomplete information.

(9) From the moment the National Commission requests new documents and information, according to para.(8), and until their submission by the potential acquirer, the evaluation term is suspended.

(10) Upon completion of the evaluation, the National Commission is entitled to issue an opinion regarding the acceptance or rejection of the acquisition project, which will contain the reasons for refusal and its legal basis.

(11) The opinion regarding the rejection of the acquisition project is communicated to the potential buyer on the date the decision is made.

(12) The opinion regarding the rejection of the acquisition project is published in the Official Gazette of the Republic of Moldova and/or in another manner only at the request of the potential buyer.

(13) If the National Commission does not take a decision regarding the rejection of the acquisition project, it is considered accepted on the date of expiry of the evaluation term.

(14) If the potential buyer does not obtain, according to the acquisition project, a qualified holding or a share of 20%, 30% or 50% of the capital of the investment company within 6 months from the date of acceptance of the acquisition project, the potential buyer is obliged to notify the National Commission again of the intention to obtain the mentioned shares.

(15) If the person has not previously notified the National Commission according to para.(1) and (2), the National Commission suspends the voting right of the shares in the capital of the investment company of the person in question in the amount of the share exceeding the limits for which notification to the National Commission was necessary and/or suspends the license of the investment company until the completion of the procedure for evaluating the compliance of the person with the qualified holding.

(16) The person who has not previously notified the National Commission is obliged, within 3 months, to notify the National Commission, respecting the provisions established by this article, or to sell the shares held without notification to the National Commission. After the expiry of this term, if the shares have not been sold or the National Commission has issued an opinion regarding the rejection of the acquisition project, the investment company that issued the respective shares is obliged to cancel the respective shares, to issue new shares in the same number and to sell them, transferring the funds received from the sale, after deducting the expenses incurred, to the disposal of the holder of the cancelled shares. In case of non-compliance with the provisions of this paragraph, the provisions of art.401 shall apply accordingly.

(17) If it has been notified simultaneously in respect of several acquisition projects concerning an investment firm, the National Commission shall treat all potential buyers without discrimination.

(18) Taking into account the criteria set out in paragraph (19), if it considers that the person with qualifying holdings may exercise an influence that could be detrimental to the sound and prudent management of the investment firm and if there are reasonable grounds in this regard, the National Commission shall apply one of the following measures:

a) refuse the application for the issuance of the investment firm licence;

b) suspend the investment firm licence previously granted;

c) issue an opinion regarding the rejection of the acquisition project.

(19) The National Commission shall assess the suitability of persons with qualifying holdings on the basis of the following criteria:

a) the reputation of the potential acquirer;

b) the reputation and experience of the persons who will manage the activity of the investment firm;

c) the financial soundness of the potential acquirer, taking into account, in particular, the type of activity that the investment firm intends to carry out;

d) the ability of the investment firm to comply with the prudential requirements under the provisions of this law;

e) the existence of reasonable grounds to suspect that a money laundering or terrorist financing operation or attempt has been or is being committed or that the acquisition project could increase such a risk.

(20) The provisions of this article shall not apply to the acquisition of shares in the capital of commercial banks that hold or apply for an investment firm licence.

[Art. 40 completed by Law no. 33 of 16.03.2018, in force 06.04.2018]

Article 401. Annulment, issuance and sale of holdings held in breach of the requirements regarding the quality of shareholders in the capital of the investment firm

(1) By way of derogation from the provisions of Law no. 1134/1997 on joint-stock companies, the executive body of the investment firm whose holders of securities fall, as the case may be, under the provisions of art. 40 paragraph (16), within at most 15 days from the date of expiry of the term granted to the holders of securities for the sale of the shares, shall issue and submit to the National Commission the decision on the annulment of these shares and the additional issuance of shares in the same number and of the same class.

(2) The decision of the executive body shall include information on the nominal (fixed) value of the newly issued shares, the term for offering them for sale and the conditions under which the initial offering price is set, taking into account the provisions of paragraph (11).

(3) The National Commission shall issue the decision on the registration related to the removal of the annulled shares with the restructuring of previous share issues and the decision on the registration of the newly issued shares, within at most 15 days from the date of submission to the National Commission of the decision in accordance with paragraph (1), with the corresponding documents attached. The registration of the share issue shall take place in accordance with the normative acts of the National Commission.

(4) Within at most 3 days from the date of registration of the newly issued shares in accordance with paragraph (3) of this article, the central depository/registry companies/investment firms that keep the records of the holders of securities to which the provisions of art. 40 paragraph (16) have become applicable, on the basis of the decision of the executive body of the investment firm and the decision of the National Commission, shall ensure the registrations regarding the annulment of the shares from the accounts of the respective holders of securities and the registration of the newly issued shares in the account of the investment firm.

(5) The newly issued shares and registered in the account of the investment firm, until their sale in accordance with this article, are outstanding shares without voting rights, do not grant the right to receive dividends and a part of the company's assets in the event of its liquidation, and cannot constitute a contribution to the share capital of a commercial company. The shareholders of the investment firm do not have a pre-emption right over the newly issued shares under the conditions of this article.

(6) Within at most 5 days after the setting of the initial price in accordance with paragraph (11) of this article, the investment firm shall offer the newly issued shares for sale and disclose to the public, in the manner set out in art. 16 paragraph (2) letters a), c) and d), the information provided for in art. 14 paragraph (1), as well as the description of the business and financial situation of the investment firm over the last 3 years.

(7) The term for the sale of the newly issued shares by the investment firm must not exceed 3 months from the date of offering them for sale, except as indicated in paragraph (8). The newly issued shares may be offered for sale only after the initial price has been set under the conditions of paragraph (11).

(8) At the request of the investment firm, the National Commission may order the extension of the 3-month term provided for in paragraph (7) by periods of at most 3 months each, no more than three times, if the extension is necessary in order to prevent the endangerment of financial stability or there is a public interest in ordering the extension, or when a potential acquirer of the shares offered for sale has been identified, without a prior assessment by the National Commission, whose suitability and appropriateness is not subject to justified suspicion at the time of ordering the extension.

(9) The National Commission shall inform the investment firm about the extension of the term provided for in paragraph (8) before the expiry of the previous term set for the sale of the newly issued shares.

(10) The sale of the newly issued shares shall take place on the regulated market or within an MTF, at the initial price set under the conditions of paragraph (11), which may be subsequently modified under the conditions of paragraph (13).

(11) The initial offering price for the sale of newly issued shares is set within no more than 3 months from the date of expiry of the term granted to holders of securities for the sale of shares, under the following conditions:

a) if the quota does not exceed 33% – starting from the value of the shares resulting from the application of one of the criteria provided in Art. 23 para. (2), with the application of Art. 23 para. (7) for the criterion established in Art. 23 para. (2) letter a);

b) if the quota exceeds 33% – starting from the value of the shares resulting from an expert appraisal carried out by an independent evaluator in accordance with international valuation standards.

The determination of the price according to letter b) is carried out by a person qualified in the field of valuation, registered in the register of authorized persons, kept by the National Commission in the manner established by it.

(12) The executive body of the investment company is entitled to modify the price of the shares offered for sale at intervals of at least once every 3 months from the date of offering for sale or of the last modification of the price. Price fluctuations are allowed within limits of up to 30 percent with respect to the previously established price, with the presentation of the respective arguments to the National Commission. In the event of the occurrence of factors that significantly influence the previously established price, for the feasibility of the transaction, price fluctuation above the 30 percent limit is allowed, with the presentation of justifying arguments.

(13) Any modification of the price is to be notified in advance to the National Commission and disclosed to the public at least in the manner established in Art. 16 para. (2) letters a), c) and d).

(14) In the case of the acquisition of newly issued shares in quotas representing qualified holdings, the requirements provided in Art. 40 shall be observed.

(15) The monetary funds obtained as a result of the sale of newly issued shares are transferred into a provisional bank account, opened by the investment company for this purpose. The investment company records the monetary funds obtained as a result of the sale of newly issued shares in the accounts of the former holders, applying the principle of proportionality, after withholding the amounts related to fines applied to the former holders, if these were applied and were not paid, and the expenses related to the sale, including taxes, payments, commissions. The provisions of this paragraph apply without prejudice to the applicability of the provisions of the legislation on the prevention and combating of money laundering and terrorist financing.

(16) Investment companies immediately inform the issuing investment company about the clients who have acquired shares. Within 5 days from the expiry of the term provided for the sale,

the issuing investment company submits to the National Commission the list of persons who have acquired the newly issued shares.

If, within the term provided in the decision of the executive body of the investment company, the newly issued shares have not been sold or have been sold partially, the shares that have not been sold are to be cancelled, and the executive body, by derogation from the provisions of Law No. 1134/1997 on joint-stock companies, is obliged to adopt the decision to reduce the share capital.

(17) Within 30 days from the date of approval by the executive body of the investment company of the decision on the reduction of the share capital by cancelling the shares, the investment company submits to the National Commission the documents established by its normative act for the registration of the modifications related to the reduction of the share capital.

(18) Upon the cancellation of the unsold shares, the investment company pays the former holders the nominal (fixed) value of the shares, except in the case where the weighted average trading price on the regulated market or MTF in the last 6 months prior to the cancellation is lower than the nominal (fixed) value, without taking into account the price formed through manipulation on the capital market.

If the weighted average trading price on the regulated market or MTF in the last 6 months prior to the cancellation is lower than the nominal (fixed) value, the investment company pays the former holders the value according to the weighted average trading price on the regulated market or MTF, based on the principle of proportionality, after withholding all expenses (taxes, payments, commissions, the amount of fines) related to the cancellation.

If the net assets of the investment company are lower than the share capital, the cancellation of the shares and the reduction of the share capital of the investment company are carried out without paying a value to the former holders.

The registration of the reduction of the share capital takes place in accordance with the normative acts of the National Commission.

[Art. 401 introduced by Law No. 33 of 16.03.2018, in force 06.04.2018]

Section 3 Requirements regarding the organization and operation of investment companies

Article 41. General organizational requirements

(1) The investment company is obliged to meet the following requirements:

a) to establish, apply and maintain decision-making procedures and an organizational structure that precisely and in a documented manner specify the hierarchical structures and allocate functions and responsibilities;

b) to guarantee that the relevant persons of the investment company know the procedures to be followed for the adequate fulfilment of their responsibilities;

c) to establish, apply and maintain adequate internal control mechanisms designed to ensure compliance with existing decisions and procedures at all levels of the investment company;

d) to employ personnel endowed with the skills, knowledge and professional experience necessary to fulfil the assigned responsibilities;

e) to establish, implement and maintain at all relevant levels of the investment firm an effective internal reporting and information communication system;

f) to keep an adequate and orderly record of the operations carried out and of the internal organisation;

g) to ensure that the performance by the competent persons of several functions does not prevent and is not likely to prevent those persons from performing a certain function correctly, honestly and professionally;

h) to establish, implement and maintain remuneration policies and practices that promote and are consistent with an adequate and effective risk management.

(2) In order to meet the requirements laid down in paragraph (1) point g), investment firms shall take into account the nature, scale and complexity of the activities carried out by them, as well as the nature and range of the investment services and activities undertaken within those activities.

(3) The investment firm shall be obliged to establish, implement and maintain adequate systems and procedures for safeguarding the security, integrity and confidentiality of information, taking into account the nature of the information in question.

(4) Investment firms shall be obliged to establish, implement and maintain an adequate business continuity policy to ensure, in the event of disruption of their systems and procedures, the preservation of essential data and functions, as well as the continuation of investment services and activities or, where this is not possible, the timely recovery of those data and functions and the timely resumption of investment services and activities.

(5) Investment firms shall be obliged to establish, implement and maintain accounting policies and procedures that enable them to provide, in a timely manner, to the competent authority, at its request, financial statements that would reflect a true and fair view of the financial situation of those firms and would comply with all accounting standards and rules in force.

(6) Investment firms shall be obliged to monitor and periodically assess the adequacy and effectiveness of their internal control systems and mechanisms and of the arrangements concluded in accordance with paragraph (1), (3)–(5) and to take adequate measures to remedy any deficiencies.

(7) The management bodies of the investment firm and, where applicable, the supervisory bodies of the management bodies must periodically assess and verify the effectiveness of the policies, arrangements and procedures implemented and take adequate measures to remedy any deficiencies.

This assessment and/or verification shall be carried out on the basis of written reports submitted by the responsible persons at least once a year.

(8) The investment firm shall be obliged to establish, implement and maintain effective and transparent procedures for the reasonable and prompt settlement of complaints received from retail clients or potential retail clients and to record each complaint and the measures taken to settle it.

[Art.41 completed by Law no.33 of 16.03.2018, in force 06.04.2018]

Article 42. Compliance verification

(1) The investment firm shall be obliged to establish, implement and maintain adequate internal policies and procedures designed to detect any risk of failure by the firm to comply with its obligations under this law, as well as the associated risks, and to adopt adequate measures and procedures to minimise those risks. To this end, the investment firm shall take into account the nature, scale and complexity of its activities, as well as the nature and range of the investment services and activities undertaken within those activities.

(2) The investment firm shall be obliged to establish and maintain a permanent and effective internal control function, which is independent and has the following responsibilities:

a) to monitor and periodically assess the adequacy and effectiveness of the measures and procedures applied in accordance with paragraph (1), as well as the actions taken to remedy the firm's deficiencies in complying with the obligations in question;

b) to advise and assist the relevant persons responsible for providing investment services and activities with regard to compliance with the firm's obligations under this law.

(3) In order to enable persons with a compliance verification function to properly and independently fulfil their responsibilities, the investment firm shall ensure that it meets the following conditions:

a) the person with a compliance verification function must have the necessary authority, resources and experience and have access to all relevant information;

b) a person responsible for compliance verification and for drawing up any reports related to compliance verification provided for in Art.41 paragraph (7) is appointed;

c) the relevant persons involved in compliance verification shall not be involved in providing the services or activities they monitor;

d) the method of determining the remuneration of the relevant persons responsible for compliance verification shall not compromise their objectivity and shall not be likely to compromise it.

(4) The investment firm may not comply with the obligations laid down in paragraph (3) point c) or point d) if it can demonstrate that, depending on the nature, scale and complexity of its activities and depending on the nature and range of the investment services and activities, the obligation imposed by the respective letter is not proportionate, and the compliance verification function continues to be effective.

Article 43. Risk management

(1) Investment firms shall be obliged to undertake the following actions:

1) to establish, apply and maintain adequate risk management policies and procedures to identify the risks related to the company's activities, processes and systems and, where appropriate, to set the level of risk tolerated by the company;

2) to adopt effective risk management provisions, processes and mechanisms related to the company's activities, processes and systems, taking into account the established level of risk tolerance;

3) to monitor:

a) the adequacy and effectiveness of their risk management policies and procedures;

b) the degree of compliance by the investment company and the relevant persons with the provisions, procedures and mechanisms adopted in accordance with point 2);

c) the adequacy and effectiveness of the measures adopted to remedy any deficiencies in the respective policies, procedures, provisions, processes and mechanisms, including non-compliance by the relevant persons with the aforementioned provisions, processes and mechanisms or non-compliance with the policies and procedures.

(2) Where appropriate and depending on the nature, scale and complexity of the investment company's activities, as well as depending on the nature and range of investment services and activities undertaken within the respective activities, the investment company shall establish and maintain a risk management function that is independent and has the following tasks:

a) implementation of the policy and procedures referred to in paragraph (1);

b) providing reports and advice to the management bodies in accordance with Art. 41 paragraph (7).

(3) Where the investment company is not required to establish and maintain an independent risk management function, it shall demonstrate that the policies and procedures adopted in accordance with paragraph (1) meet the requirements set out in that paragraph and are fully effective.

(4) The investment company shall ensure the allocation of adequate resources for the management of all significant risks.

[Art. 43 completed by Law no. 33 of 16.03.2018, in force 06.04.2018]

Article 44. Internal audit Where appropriate and depending on the nature, scale and complexity of the investment company's activities, as well as depending on the nature and range of investment services and activities undertaken within the respective activities, the investment company shall adopt and maintain an internal audit function, separate and independent from the other functions and activities of the investment company and which has the following responsibilities:

a) to establish, apply and maintain an audit plan for verifying and assessing the adequacy and effectiveness of the systems, internal control mechanisms and procedures of the investment company established by this chapter;

b) to issue recommendations based on the results of the activity carried out in accordance with letter a);

c) to verify compliance with the aforementioned recommendations;

d) to draw up reports on internal audit issues in accordance with Art. 41 paragraph (7).

Article 45. Restrictions on personal transactions

(1) Relevant persons are obliged to inform the investment company of the intention to carry out a personal transaction.

(2) A personal transaction may be carried out by the relevant person only with the prior authorisation of the internal committee created for this purpose by the investment company.

(3) The relevant person is not entitled to carry out a personal transaction where:

a) by carrying out this transaction the requirements established in section 2 of chapter VI are breached;

b) carrying out the transaction involves the use of inside information;

c) by carrying out this transaction it enters or could enter into conflict with an obligation of the investment company towards its clients.

(4) The relevant person or the delegated agent is not entitled to provide advice regarding the trading of a financial instrument within a personal transaction where:

a) the conditions established in paragraph (3) are met;

b) it falls under the provisions of paragraph (6) letters a) and b);

c) it involves the abusive use of information regarding the pending orders of the investment company's clients.

(5) The relevant person is not entitled to disclose information or opinions to another person, within a personal transaction, if they know or ought to know that the person in question acts in one of the following ways:

a) carries out a transaction with financial instruments, which meets the conditions established in Art. 46 paragraph (6) letters a) and b);

b) involves the abusive use of information regarding the pending orders of the investment company's clients;

c) recommends to another person to carry out a transaction with financial instruments.

(6) Investment companies are obliged to establish and apply measures that:

a) prevent and exclude the carrying out of a personal transaction by the relevant persons in the cases established in paragraphs (3)–(5);

b) ensure knowledge of the restrictions regarding the carrying out of personal transactions by the relevant persons;

c) ensure the activity of the specialised internal committee that examines the intention of the relevant person to carry out a personal transaction;

d) ensure the recording of personal transactions concluded by the relevant persons, including the decisions of the specialised internal committee that examines the intention of the relevant person to carry out a personal transaction.

(7) The provisions of paragraphs (1)–(6) do not apply where:

a) the personal transaction is carried out under a discretionary portfolio management service, in which there is no prior communication regarding the respective transaction between the portfolio manager and the relevant person or another person in whose account the transaction is carried out;

b) the personal transaction involves trading in units of the fund (shares) issued by the UCITS, provided that the relevant person and any other person in whose account the transaction is carried out are not involved in the management of this UCITS.

Article 46. Conflicts of interest

(1) The policies on conflicts of interest applied by the investment company ensure the identification of conflicts of interest between the employees of the investment company and the delegated agent, as well as between the investment company and its employees, on the one hand, and the clients of the investment company, on the other hand.

(2) The policies on conflicts of interest take into account the size and nature of the activities carried out by the investment company, considering the following conditions:

a) the policies shall establish the criteria for identifying situations that generate or may generate conflicts of interest in accordance with paragraph (3);

b) the policies shall establish the measures taken by the company in the event of conflicts of interest in accordance with paragraph (4).

(3) For the identification of cases of conflicts of interest, the investment company takes into account situations in which the investment company, the relevant persons and/or the persons who hold control over the investment company correspond to one of the following situations:

a) they may obtain a profit or may avoid a financial loss at the expense of the client;

b) they have an interest as a result of the provision of the respective service to the client, this result being different from the interest pursued by the client;

c) they are financially or otherwise incentivized to favor the interest of another client to the detriment of the client in question;

d) they carry out the same activity as the client;

e) they receive or will receive from a person other than the client a financial or other incentive for the service provided to the client in question.

(4) When establishing the policies implemented in the event of conflicts of interest, investment companies take into account at least the following measures:

a) the application of effective procedures for the prevention and control of the exchange of information between the relevant persons involved in activities that involve a risk of conflict of interest;

b) the supervision of the relevant persons whose functions include carrying out activities on behalf of clients or providing services to clients whose interests may conflict with the interests of the investment company or of the persons in question;

c) the elimination of direct conditioning between the remuneration of the relevant persons who carry out certain activities and the remuneration of other relevant persons who carry out other activities, where the respective activities may create conflicts of interest;

d) the application of measures to prevent and exclude cases of influence by a person over the relevant person in the process of carrying out activities within the investment company;

e) the application of measures to prevent and exclude cases where the relevant person is involved in different investment services and activities and/or ancillary services, which generate or may generate conflicts of interest, or may harm the effective supervision of conflicts of interest within the investment company.

(5) If the internal policies do not ensure the avoidance of certain conflicts of interest and/or do not guarantee the identification of certain conflicts of interest, the investment company is obliged to inform its clients of this fact before carrying out an activity in the interest of the clients.

(6) If the investment company prepares and disseminates investment research, the investment company is obliged to apply measures that will ensure compliance with the following requirements:

a) the financial analyst and other relevant persons involved in the preparation and dissemination of the investment research are not entitled to carry out personal transactions or to trade, on behalf of another person, the financial instruments to which the investment research refers. The trading restriction on behalf of another person does not apply if the financial analyst and other relevant persons involved act as a market maker, provided that they carry out this activity in good faith and in the process of the ordinary evolution of market formation;

b) in cases other than those provided for in letter a), the financial analyst and the relevant persons involved are not entitled to carry out transactions with the financial instruments to which the investment research refers under conditions contrary to or different from those indicated in the research;

c) the financial analyst, other relevant persons involved and the investment company itself are not entitled to accept financial or other incentives from persons who have a significant interest as a result of the preparation and distribution of the investment research;

d) the financial analyst, other relevant persons involved and the investment company are not entitled to promise issuers of financial instruments the preparation of research favorable to them or to carry out such research according to a prior agreement;

e) the recommendations, proposals and estimates in the investment research may not be subject to prior approval by the issuers of financial instruments, the relevant persons and persons other than the financial analyst.

(7) When disseminating investment research, the investment company is entitled not to comply with the provisions of paragraph (6) if the following conditions are met:

a) the financial analyst is not a relevant person of the investment company and of the legal persons that have close links with the investment company;

b) the investment company does not modify the estimates, recommendations and proposals in the investment research;

c) the investment research is not disseminated as a product of the investment company.

Article 47. Custody of clients' assets

(1) Custody shall be effected by depositing in the name of the investment firm the financial instruments and monetary funds of clients.

(2) When depositing clients' assets in its own name, the investment firm shall open individual sub-accounts in the names of the clients and shall ensure the record of the assets held by each client separately.

(3) If it holds monetary funds and financial instruments in the name of its clients, the investment firm shall be obliged to establish internal procedures, in accordance with the provisions of this article, which:

a) will ensure the integrity and safety of clients' monetary funds and financial instruments;

b) will allow keeping records of clients, of their monetary funds and financial instruments.

(4) When keeping records of the assets held in the name of their clients, investment firms shall be obliged:

a) to make records and keep the necessary accounts in such a way as to ensure the record of each client's assets, as well as the separate record of own assets;

b) to keep records of clients' assets in such a way as to ensure the correspondence of the records with the clients' assets that they hold;

c) to periodically carry out reconciliations between the internal records and accounts and the accounts and records of third parties with which the clients' assets are deposited;

d) to apply the necessary measures to ensure that the record of clients' financial instruments, deposited in accordance with paragraph (1), is carried out in such a way as to allow their delimitation from the assets of the investment firm and from the assets of the third party;

e) to apply the necessary measures to ensure that the record of clients' monetary funds, deposited with a specialized institution in accordance with paragraph (1), is carried out in such a way as to allow their delimitation from the assets of the investment firm;

f) to apply the necessary measures to minimize the risk of loss or diminution of the value of clients' assets or of the rights related to those assets, as a result of abuse, fraud,

mismanagement, inadequate accounting records or negligence on the part of the investment firm or its employees.

(5) The client's assets held by investment firms may not be pursued for the satisfaction of claims brought by creditors of the investment firms, including in cases of insolvency of the investment firms.

(6) The investment firm shall be entitled to carry out transactions with securities using the financial instruments held in the name of a client or to use the respective instruments on its own account or on the account of another client only if the following conditions are cumulatively met:

a) the client has given its prior express consent regarding the use of the instruments under precise conditions, based on its signature or an equivalent method of acceptance;

b) the use of the client's financial instruments is limited to the conditions established by the client.

(7) The investment firm shall be obliged to present to the issuer, the offeror and/or the organization that ensures the keeping of the register of holders of these securities the information about the securities reflected in its records and about their holders:

a) when the issuer prepares specific reports;

b) when preparing the list of persons entitled to participate in the general meeting of shareholders; as well as

c) when carrying out takeover offers.

Article 48. Handling of complaints For the purpose of handling complaints, investment firms shall be obliged:

a) to approve and apply internal procedures related to the examination and handling of complaints of clients or potential clients;

b) to ensure transparency and accessibility for clients and potential clients of the internal procedures related to the examination and handling of complaints of clients or potential clients;

c) to keep records of complaints and of the measures taken regarding submitted complaints.

Section 4 Protection of the interests of clients of investment firms

Article 49. Rules of conduct

(1) The investment firm shall be obliged to provide investment services and ancillary services in an honest, fair and professional manner, which corresponds to the client's interests.

(2) In order to ensure the provisions of paragraph (1), before carrying out an activity in the client's interest, the investment firm shall be obliged to communicate to the client:

a) any public information regarding the investment firm and the services it provides;

b) information regarding the financial instruments and investment strategies applied by the investment firm, including the risks related to these instruments and investment strategies;

c) the conditions for the provision of services, including the costs and payments that these services entail;

d) the requirements established by currency legislation, including the part referring to currency operations.

(3) The information provided to clients by the investment firm shall be correct, complete and clear.

(4) The information and advertising measures of the investment firm shall be carried out in accordance with the provisions of Law No. 1227-XIII of 27 June 1997 on advertising.

(5) If portfolio management or investment consultancy services are offered, before carrying out an activity in the interest of its client, the investment firm shall be obliged to request from the client information regarding the client's financial situation and investment objectives, regarding the knowledge and experience in the field of investments in financial instruments, taking into account the type of product or service requested by the client.

(6) If it offers other services than those mentioned in para. (5), until carrying out an activity in the interest of its client, the investment company is obliged to request from the client information regarding their knowledge and experience in the field of investments in financial instruments, taking into account the type of product or service requested by the client.

(7) If the investment company estimates, based on the information obtained in accordance with para. (6), that the product and/or service requested by the client does not correspond to their requirements or interests, the investment company is obliged to communicate this fact to the client.

(8) If the client does not provide the information set out in para. (5) and (6) or if the information provided is insufficient, the investment company communicates to the client that it cannot establish for this reason whether the product or service requested corresponds to the client's requirements and interests.

(9) When providing the services specified in art. 33 para. (1) lit. a) and b), with or without the provision of ancillary services, the investment company is entitled not to request the information specified in para. (6) if the following conditions are fully met:

a) the order received from the client refers to shares admitted to trading on a regulated market of the Republic of Moldova or of the member states of the European Union, to money market instruments, to bonds and other types of debt securities, to fund units issued by UCITS;

b) the service is provided at the client's initiative;

c) the client has been clearly informed that, when providing the service in question, the investment company is not obliged to assess whether the financial instrument or service corresponds to the client's requirements and interests and, consequently, the client does not benefit from the corresponding protection of the relevant conduct rules;

d) the investment company meets the requirements regarding conflicts of interest specified in

art. 46.

(10) The investment company is obliged to prepare a file that will include all documents received from the client and the legal acts concluded between the investment company and the client.

(11) The investment company is obliged to conclude a written contract with its client, which will include the rights and obligations of the parties, as well as the conditions under which the investment company provides services to the client.

(12) During the period of providing the service and/or upon completion of its provision, the investment company is obliged to present to the client reports regarding the service provided and the payments related thereto.

(13) Investment companies are obliged to classify their clients and to apply to them the respective measures provided by this law.

Article 50. Outsourcing of important and essential operational functions

(1) An operational function is considered important and essential if the unplanned discontinuation of this function would considerably compromise the ability of the investment company to comply with the provisions of this law and of the regulations of the National Commission or would compromise the financial performance of the investment company.

(2) The following functions are not considered important and essential, in the context of para. (1):

a) the provision to the investment company of consultancy services and other services that are not part of the company's investment activity, including legal consultancy, staff training, invoicing services, security of the premises and of the staff;

b) the procurement of information services regarding the market and prices, other similar services.

(3) The investment company is entitled to transmit to another investment company the execution of some or all of the important and essential operational functions related to investment services and activities if it considers that the outsourcing will ensure the provision of investment services to clients and the carrying out of investment activities in accordance with the legislation.

(4) The outsourcing of important and essential operational functions is carried out by the investment company in such a way as not to significantly harm the quality of the investment company's internal control and not to create impediments for the National Commission in carrying out its supervision and control duties.

(5) The outsourcing of some investment services and ancillary services may be carried out only with the express consent of the client.

(6) When outsourcing some investment services and ancillary services, the investment company that transmits the execution of the services will present all the information and instructions received from clients, and the investment company that receives the execution of the services will execute these functions in compliance with the clients' instructions and taking into account the information received.

(7) The investment company that has transmitted the execution of some services to another investment company, as a result of an outsourcing, remains responsible for the completeness and accuracy of the information and instructions of the client transmitted to the investment company that received the execution of these services.

(8) The outsourcing of some investment services does not absolve the investment company of responsibility towards the client to whom these services are provided.

(9) The investment company outsources its important and essential operational functions subject to the following conditions:

a) the outsourcing cannot result in the transmission of responsibilities and functions of the persons who manage the activity of the investment company;

b) the relationship between the investment company and its clients and the company's obligations towards clients established by this law and by the normative acts of the National Commission will not be affected;

c) the conditions that the investment company must meet in accordance with Section 2 of this Chapter shall not be affected.

(10) Investment companies are obliged to act with full competence, care and diligence when concluding, executing and/or terminating a contract relating to the outsourcing of important and essential operational functions, complying with the following conditions:

a) the person to whom the execution of the functions has been transferred shall possess the respective competence, capacity and, where applicable, authorisations and shall meet the requirements established by law for carrying out the outsourced functions;

b) the person to whom the execution of the functions has been transferred shall carry out these functions in an efficient manner, and the investment company shall apply methods for evaluating the performance of this person;

c) the person to whom the execution of the functions has been transferred shall supervise the manner of execution of the outsourced functions and shall adequately manage the risks related to these functions;

d) the investment company shall take the necessary measures if the person to whom the execution of the functions has been transferred does not exercise these functions efficiently and in accordance with the law;

e) the investment company shall supervise the process of exercising the outsourced functions by the person to whom the execution of the functions has been transferred and shall manage the risks related to the outsourcing;

f) the person to whom the execution of the functions has been transferred shall inform the investment company about any event that could have a significant impact on its ability to carry out the outsourced tasks efficiently in accordance with the applicable law;

g) the investment company shall be able to terminate the contract relating to the outsourcing of functions without affecting the continuity and quality of the investment services offered to clients;

h) the person to whom the execution of the functions has been transferred shall cooperate with the competent bodies and/or persons of the investment company with regard to the execution of the outsourced functions;

i) the person to whom the execution of the functions has been transferred shall ensure the access of the investment company, of the investment company's auditors and of the National Commission to the information regarding the outsourced functions and to the registered office or premises related to the exercise by this person of the outsourced functions;

j) the person to whom the execution of the functions has been transferred is obliged to take the necessary measures to protect confidential information regarding the investment company and its clients;

k) the investment company and the person to whom the execution of the functions has been transferred shall jointly establish and apply a contingency plan regarding data recovery in the event of malfunction and periodic testing of backup systems (backup copy of data).

(11) The investment company shall take the necessary measures so that the rights and obligations of the investment company and of the person to whom the operational functions have been outsourced are established clearly and completely within a contract concluded in written form.

(12) If the services related to the portfolio management of retail clients are outsourced to a person from another state, in addition to the provisions established in paragraphs (3)–(11), the investment company is obliged to outsource these services to a foreign investment company or licensed bank that meets the following requirements:

a) the person is authorised or registered in the country of origin and is subject to prudential supervision by the competent authority;

b) the person is supervised by a supervisory authority that has concluded a cooperation agreement with the National Commission.

(13) If the person from another state meets only one of the requirements established in paragraph (12), the investment company may outsource the services related to the portfolio management of retail clients after informing the National Commission in advance, provided that the latter has not sent the investment company an objection in this regard within at most 15 days from the information.

(14) For the purpose of executing the provisions of paragraph (13), the National Commission:

a) publishes and updates the list of supervisory authorities from other states that have concluded cooperation agreements with the National Commission;

b) establishes the criteria according to which the National Commission will approve the outsourcing of important and essential operational functions of investment companies.

Article 51. Execution of orders under the most favourable conditions for clients

(1) Investment companies take all necessary measures to execute orders under the most favourable conditions for clients, taking into account the price, costs, period and conditions of execution, size, nature and other relevant considerations regarding the client's order.

(2) In order to achieve paragraph (1), investment companies apply appropriate order execution policies and measures, which will allow the best possible result to be obtained for their clients.

(3) Order execution policies establish different methods of executing client orders, taking into account different types of financial instruments and the nature of the service provided, and establish the criteria that determine the choice of the execution method for the order in question.

(4) Investment companies inform the client about their order execution policies and obtain the client's consent for the application of these policies until the execution of the order.

(5) If the order execution policies allow for the possibility of executing an order outside a regulated market or an MTF, the investment company informs the client of this fact separately and obtains the client's express consent for the execution of the order outside a regulated market or an MTF. The client's consent may be general, for several transactions, or individual, for each transaction separately.

(6) Investment firms monitor the effectiveness of their policies and measures for executing client orders in order to identify and, where necessary, remedy any deficiencies regarding the execution of client orders under the conditions most favourable to them.

(7) Investment firms apply the necessary measures that enable them to demonstrate to clients, at their request, that they have executed orders in accordance with their internal policies.

(8) When executing orders regarding financial instruments on clients' accounts, investment firms apply appropriate measures that ensure the immediate and priority execution of these orders in relation to other client orders and to the investment firm's own trading intentions.

(9) Where a client's limit order relating to shares admitted to trading on a regulated market has not been executed immediately under the existing market conditions, the investment firm shall, unless the client has expressly prohibited this, take appropriate measures that allow the order to be executed as quickly as possible, transferring the order in question to another regulated market or to another MTF.

Article 52. Obligations related to contracting a tied agent

(1) When contracting a tied agent, investment firms:

a) take appropriate measures to ensure that the tied agent informs clients or potential clients that it is acting as a tied agent of the investment firm, before providing the service or offering advice;

b) supervise and control the activity of the tied agent to guarantee that the activity of the investment firms is carried out in accordance with this law and with the normative acts of the National Commission;

c) contract as tied agents persons with a good reputation and who possess the necessary knowledge to act in this capacity and to correctly communicate to any client or potential client the information related to the service or advice provided;

d) apply stringent measures to prevent the activities of tied agents that do not fall within the regulatory scope of this law from affecting its activity as a tied agent.

(2) Where it contracts a tied agent, the investment firm remains fully and unconditionally responsible for the activities carried out by the tied agent in the name or on behalf of the investment firm.

(3) Investment firms contract only tied agents entered in the public Register of tied agents, kept by the National Commission.

(4) Investment firms submit to the National Commission the relevant information regarding contracted tied agents.

Article 53. Transactions with eligible counterparties

(1) Investment firms which, in accordance with the licences they hold, are entitled to provide the services and carry out the activities specified in Art. 33 para. (1) letters a)–c) are exempt from the obligation to comply with the provisions of Art. 49 and Art. 51 para. (1)–(8) in respect of transactions relating to the services and activities specified in Art. 33 para. (1) letters a)–c) and their ancillary services, concluded with eligible counterparties.

(2) When carrying out a transaction under the conditions of para. (1), investment firms obtain the express consent of the respective persons that they accept to be considered, generally or separately for a specific transaction, as eligible counterparties in relation to the investment firm in question.

(3) The eligible counterparty is entitled to request the investment firm not to be considered, generally or separately for a specific transaction, an eligible counterparty in relation to the investment firm in question. Upon making this request, the investment firm shall consider the eligible counterparty as an ordinary client and shall apply to it the provisions of Art. 49 and Art. 51 para. (1)–(8).

Section 5 Rights of the investment firm

Article 54. Freedom to provide services and to carry out activities

(1) Investment firms are entitled to provide investment services and to carry out investment activities, to provide ancillary services, in accordance with the licence held.

(2) Investment firms are entitled to provide investment services and to carry out investment activities, to provide ancillary services directly or by establishing branches, throughout the territory of the Republic of Moldova and in states whose supervisory authorities have concluded cooperation agreements with the National Commission.

(3) When establishing a branch in the territory of the Republic of Moldova, the investment firm shall inform the National Commission of this fact no later than 15 days before the date of commencement of the activity of the branch in question.

(4) When carrying out an activity in the territory of another state directly or by establishing a branch, the investment firm shall inform the National Commission of this fact no later than one month before the date of commencement of the activity, providing the following information:

a) the state in which it will carry out the activity;

b) the manner of carrying out the activity (directly or through a branch) and, where applicable, the address of the branch;

c) the programme of activities planned in the territory of that state, including the type of investment services and activities, of ancillary services to be provided and carried out, the intention to contract tied agents from the respective state and their identity;

d) the address at which documents may be requested in the host state;

e) the names of the persons entrusted with the management of the branch.

(5) Within no more than one month from receiving the information in accordance with para. (4), the National Commission shall transmit the respective information to the supervisory authority of the state in which the investment firm will carry out activities.

(6) If, after initiating activity on the territory of another state, the investment company changes the conditions specified in paragraph (4), it shall inform the National Commission no later than one month before the date of effecting the changes in question, and the National Commission shall inform the supervisory authority of that state of this fact no later than one month.

(7) The National Commission shall perform the regulatory, supervisory and control functions with respect to the activity carried out on the territory of another state by the investment company, without prejudice to the regulatory, supervisory and control functions of that state.

(8) In performing its regulatory, supervisory and control functions over the activity carried out on the territory of another state by the investment company, the National Commission shall cooperate with the competent authorities of that state.

Article 55. Access to regulated markets

(1) Investment companies are obliged to become members of at least one regulated market in the Republic of Moldova, based on the decision of the market operator.

(2) Investment companies are entitled to become members of regulated markets outside the Republic of Moldova, provided that they inform the National Commission of this fact no later than the date of obtaining membership status.

(3) Accepted persons carrying out one of the activities specified in Art. 33 para. (1) let. b) and

c) are entitled to become members of one or more regulated markets in the Republic of Moldova by the following means:

a) holding membership status through a subsidiary opened in the Republic of Moldova;

b) holding membership status remotely, without the need to hold membership status directly.

(4) Regulated markets are not entitled to establish discriminatory or disproportionate conditions for obtaining membership status.

Article 56. Access to the central depository and to clearing and settlement systems

(1) Investment companies and accepted persons are entitled to have access to the central depository and to its clearing and settlement systems.

(2) Investment companies from the Republic of Moldova are entitled to have access to the central depository and to clearing and settlement systems from abroad, provided that they communicate this fact to the National Commission no later than the date of obtaining access.

(3) The central depository is not entitled to establish for accepted persons discriminatory or disproportionate conditions in relation to investment companies from the Republic of Moldova.

(4) The investment company and accepted persons are entitled to carry out clearing and settlement in transactions with financial instruments and through a system other than that of the central depository only if:

a) there is a link between the central depository's system and the system designated by the investment company that ensures the efficient and economical settlement of the respective transactions;

b) the competent supervisory authority that authorized the operation of the systems designated by the investment company will confirm that all the technical conditions of this system permit the orderly functioning of the market.

[Art. 56 amended by Law no. 180 of 25.07.2014, in force 15.08.2014]

Section 6 Requirements regarding market transparency and integrity, ensured by investment companies

Article 57. Record keeping

(1) Investment companies shall ensure the keeping, for a term of at least 7 years, of relevant information related to transactions with financial instruments carried out on their own account or on clients' account. In the case of carrying out a transaction on the client's account, all information regarding the identity of a client and the adequate information provided by the legislation on preventing and combating money laundering and terrorist financing shall be kept.

(2) Documents referring to the rights and obligations of the investment company and of the client and to the conditions of providing the service by the investment company, including the respective contracts, shall be kept by the investment company at least for the duration of the term indicated in paragraph (1).

(3) Other documents referring to the activity of the capital market shall be kept in accordance with the legislation on the Archival Fund of the Republic of Moldova.

Article 58. Recording and reporting of transactions

(1) Investment companies shall submit to the National Commission, in the manner established by it, reports on transactions with financial instruments carried out outside regulated markets or MTFs, no later than the working day immediately following the day on which the transaction took place.

(2) Reports on transactions with financial instruments carried out shall contain at least information regarding:

a) the financial instruments that were traded, including regarding their price, number and value and the identification data of the issuer;

b) the date and time of carrying out the transaction;

c) the identification data of the investment company involved in carrying out the transaction.

Article 59. Post-trade transparency requirements

(1) Upon concluding a transaction with financial instruments admitted to trading on a regulated market, outside the regulated market or an MTF, investment companies are obliged to make public the information regarding the volume, price and date of concluding this transaction.

(2) The information specified in paragraph (1) shall be made public, as a rule, in real time, but no later than the working day immediately following the day on which the transaction took place, under reasonable commercial conditions and in an accessible form.

(3) Other requirements for investment companies regarding the manner of reporting, recording and transparency of transactions are established by the normative acts of the National Commission.

Chapter IV CAPITAL MARKET INFRASTRUCTURE Section 1 Market operators

Article 60. General provisions on market operators and regulated markets

(1) Regulated markets may be created, administered and operated by market operators in accordance with the provisions of this law and of the normative acts of the National Commission.

(2) A regulated market may itself be a market operator.

(3) The market operator is entitled to create within itself one or more regulated markets and/or MTFs that are not legal entities.

(4) The National Commission regulates and supervises the activity of the market operator and of the regulated markets, including the activities related to the administration and operation of the regulated markets, in order to verify compliance with the provisions of this law and of the normative acts of the National Commission.

(5) No natural or legal person, except the market operator, is entitled to use the phrases “stock exchange”, “regulated market”, “trading system” and their derivatives with reference to financial instruments in its own names, in the trading systems created, in its trademarks and promotional materials.

(6) The provisions of para. (5) do not apply to relations regulated by the legislation on commodity exchanges.

Article 61. Market operator license

(1) In order to obtain a market operator license, the applicant shall submit to the National Commission an application to that effect, attaching documents confirming that the applicant cumulatively meets the following requirements:

a) has the legal organizational form of a joint-stock company, legally constituted and registered in the Republic of Moldova;

b) has own capital in the amount of the lei equivalent of at least 100000 euros calculated at the official exchange rate of the National Bank of Moldova one year after the date of entry into force of this law, the lei equivalent of at least 200000 euros calculated at the official exchange rate of the National Bank of Moldova 3 years after the date of entry into force of this law, the lei equivalent of at least 350000 euros calculated at the official exchange rate of the National Bank of Moldova 5 years after the date of entry into force of this law, the lei equivalent of at least 600000 euros calculated at the official exchange rate of the National Bank of Moldova 7 years after the date of entry into force of this law, the lei equivalent of at least 1000000 euros calculated at the official exchange rate of the National Bank of Moldova 10 years after the date of entry into force of this law;

c) has a business program, approved by a decision of the applicant's competent body, which contains the organizational structure of the company and the decision-making procedure;

d) the members of the board and the managers of the market operator are confirmed by the National Commission and meet the requirements set out in para. (2) and (3);

e) has internal policies in accordance with art. 62 para. (1).

(2) The effective management of the market operator is ensured by two persons (hereinafter – managers). The managers are employees of the market operator under individual employment contracts.

The managers are the persons who, according to the constitutive acts and/or the decision of the statutory bodies of the market operator, are empowered to coordinate its daily activity and are vested with the competence to engage the liability of the market operator. This category does not include persons who ensure the direct management of the departments within the market operator or of its secondary offices.

(3) The members of the board and the managers of the market operator must cumulatively meet the following conditions:

a) have a good reputation, qualification and professional experience for achieving the proposed objectives and for creating the premises necessary for carrying out the activity of the market operator, in accordance with the provisions of this law and with the rules of the market operator, as well as for achieving a safe, prudent and transparent administration of operations on the regulated markets administered by the operator, for the purpose of protecting investors' interests;

b) have completed higher education and professional experience of at least 5 years in the economic, financial-banking or capital market field;

c) not have valid sanctions, applied by the National Commission, the National Bank of Moldova or a similar foreign body, prohibiting or suspending the person's right to operate on the capital or banking market;

d) not have been convicted by a final sentence for offenses related to the activity carried out or for acts of corruption, money laundering, offenses against property, abuse, taking or giving of bribes, forgery and use of forgery, misappropriation of funds, tax evasion or other acts likely to lead to the conclusion that the necessary premises for ensuring a sound and prudent management of the market operator have not been created;

e) not have been administrators of a company that was in judicial reorganization or was declared insolvent or whose license (authorization) was suspended or withdrawn by the competent authority during the period of exercising the functions with which they were vested;

f) not be part of the management, not be administrators, employees or auditors at another market operator and/or system operator;

g) not hold any participation in another market operator and/or system operator in the Republic of Moldova;

h) not hold any public office;

i) hold a qualification certificate issued by the National Commission.

(4) The market operator is obliged to comply with the capital adequacy requirements in accordance with the amounts and deadlines provided in para. (1) lit. b).

[Art. 61 supplemented by Law no. 33 of 16.03.2018, in force 06.04.2018]

Article 62. Requirements regarding the activity of market operators

(1) The market operator is obliged to draw up and apply policies for the purpose of providing services and maintaining activity under the best conditions, including:

a) for identifying and managing conflicts of interest that may arise between the holders of shares in the share capital of the market operator, the employees of the market operator, the members of the regulated market and their clients, and the participants of the regulated market;

b) for internal audit;

c) regarding the security, integrity and confidentiality of internal information;

d) regarding the identification and management of risks.

(2) The market operator is obliged:

a) to have the appropriate technical equipment to maintain the operation of the trading systems and of the systems for finalizing transactions with financial instruments;

b) to have the necessary resources to ensure the orderly and continuous activity of the regulated market, taking into account the nature, volume and frequency of transactions, as well as the risks to which they are exposed;

c) to draw up and, if necessary, apply a contingency plan regarding data recovery in the event of malfunctions and periodic testing of backup systems;

d) to establish mechanisms and procedures that will ensure the efficient and timely finalization of transactions concluded within the regulated market;

e) to carry out the mandatory audit of the financial-economic year at least once a year;

f) to carry out the technical audit of the information systems used at least once every 2 years.

(3) The provisions of art. 39 para. (4)–(6) and art. 40 shall apply accordingly to market operators.

Section 2 Regulated markets

Article 63. Regulated market authorization

(1) A regulated market may be created, administered and operated by a market operator only on the basis of the regulated market authorization issued by the National Commission.

(2) The regulated market authorization shall be issued to the market operator separately for each regulated market.

(3) In order to obtain the regulated market authorization, the market operator shall submit to the National Commission an application to that effect, to which shall be attached documents confirming that the market operator cumulatively meets the following requirements:

a) has approved and coordinated with the National Commission the rules of the regulated market, which meet the requirements set out in art. 64 para. (1), which will be applied after authorization;

b) has the necessary resources and technical equipment in accordance with the provisions of art. 62 para. (2) lit. a) and b);

c) has a trading system;

d) has a staffing structure that will ensure the operation of the regulated market.

(4) The application for the regulated market authorization may be submitted concurrently with the submission of the application for obtaining the market operator license.

(5) The regulated market authorization shall be issued by the National Commission within at most 6 months from the date of submission of the authorization application, provided that the provisions of para. (3) are complied with.

(6) The application for the issuance of the regulated market authorization may be withdrawn by the market operator before the authorization is issued or the application is rejected.

(7) The National Commission shall reject the application for the issuance of the regulated market authorization if:

a) the requirements set out in para. (3) are not met;

b) the market operator is in insolvency or reorganization proceedings.

(8) The regulated market authorization shall be issued for an unlimited term and is non-transferable.

(9) The fee for the issuance of the regulated market authorization is 20000 lei, which shall be paid into the budget of the National Commission by the market operator within at most 10 days from the date of issuance of the authorization.

(10) Upon issuance of the regulated market authorization, the National Commission shall include the respective information in the Register of regulated markets kept by the National Commission.

(11) The National Commission is entitled to withdraw the regulated market authorization previously issued to a market operator if:

a) the regulated market has not started operating in that capacity within one year of receiving the authorization or has not operated in that capacity for 6 consecutive months;

b) the market operator has not paid the fee for the issuance of the regulated market authorization;

c) the market operator expressly requests the National Commission to withdraw the authorization;

d) the market operator obtained the authorization by providing false information or through other illegal measures;

e) the market operator's market operator license has been withdrawn;

f) the market operator does not comply with the requirements specified in art. 64 para. (5).

(12) In accordance with the decision of the market operator, the granting of a generic name to the regulated market, different from or identical to the name of the market operator, is permitted. The name of the regulated market shall be indicated in the regulated market authorization.

Article 64. Rules of the regulated market

(1) Regulated markets shall draw up and apply the rules of the regulated market which establish transparent, non-discriminatory and non-discretionary norms regarding:

a) trading in financial instruments;

b) the manner of price formation and execution of trading orders;

c) the requirements and conditions for obtaining, suspending and withdrawing the status of member and participant of the regulated market, as well as the rights and obligations of the members and participants of the regulated market;

d) the types of financial instruments and the requirements for financial instruments and for the issuer for admission to trading, suspension of trading and withdrawal of financial instruments admitted to trading, as well as the rights and obligations of issuers of financial instruments admitted to trading;

e) the conditions for carrying out clearing and settlement for transactions with financial instruments carried out within the regulated market;

f) the types of transactions and orders regarding financial instruments traded;

g) the regime of activity of the regulated market;

h) the conditions for the examination and arbitration of disputes between the members and/or participants of the regulated market;

i) the conditions for the examination of violations committed by the members and participants of the regulated market and by the issuers whose financial instruments are admitted to trading;

j) the manner of administration of the regulated market by the market operator, including the manner of decision-making regarding the regulated market;

k) the manner of approval and amendment of the rules of the regulated market;

l) the manner of disclosure of information.

(2) The rules of the regulated market may be adopted and amended, in accordance with the acts of the market operator, by the market operator itself or by the members of the respective regulated market.

(3) The rules of the regulated market, the amendments and additions made to these rules may be applied only after their acceptance by the National Commission.

(4) The market operator is obliged to submit to the National Commission for coordination any amendments or additions to the rules of the regulated market no later than 3 days from the date of their approval.

(5) The National Commission is entitled to request the amendment of the rules of the regulated market at the time of submitting the application for obtaining the regulated market authorization or subsequently if the rules do not comply with the provisions of para.(1) of this article and/or if it considers that they do not ensure the conditions specified in art.69 para.(1).

Article 65. Members of the regulated market

(1) Investment firms may be members of the regulated market, in accordance with the rules of the regulated markets.

(2) The rules of the regulated market expressly establish the obligations imposed on members under:

a) the provisions of legislative acts and normative acts of the National Commission regarding regulated markets;

b) the constitutive acts of the market operator;

c) the provisions of the market operator regarding transactions with financial instruments concluded within the regulated market;

d) the professional norms imposed on members;

e) the norms and procedures regarding the clearing and settlement of transactions concluded within the regulated market;

f) the legislation on currency regulation.

(3) The rules of the regulated market provide for its members the possibility of direct and remote access to the trading of financial instruments admitted to trading.

(4) Market operators are entitled to carry out periodic controls of the members of the regulated market in order to:

a) verify their compliance with the requirements of the legislation;

b) verify their compliance with the rules and other internal norms of the regulated market;

c) monitor the conditions for carrying out operations and/or activities of manipulation, market abuse or of another nature that may affect market stability.

(5) Market operators are entitled to suspend or withdraw the status of member of the regulated market or to apply other penalty measures for the violation by the market members of the rules of the regulated market.

(6) If the market operator does not undertake the measures specified in para.(5), the National Commission is entitled to request the market operator to suspend or withdraw the status of member of the regulated market.

Article 66. Admission to trading on regulated markets of financial instruments

(1) Financial instruments are admitted to trading on a regulated market at the request of the issuer of these securities.

(2) If the financial instruments are admitted to trading at the initiative of the members of the regulated market, within at most one month after admission the regulated market shall inform the issuer of this fact.

(3) Financial instruments admitted on some regulated markets or in some MTFs may also be admitted on other regulated markets or in other MTFs. The regulated market or MTF that admits the financial instruments shall inform the issuer about this.

(4) Only financial instruments that comply with the requirements of this law and the rules of the regulated market may be admitted to trading on regulated markets.

(5) The regulated market is entitled to establish requirements regarding the procedure for admission to trading of financial instruments, which shall be clear and transparent and shall guarantee that any instrument admitted to trading can be subject to fair, orderly and efficient trading, and in the case of securities – that they can be traded freely, including requirements regarding the information to be submitted by the person at whose initiative the financial instruments are admitted to trading.

(6) With regard to issuers whose financial instruments are admitted to trading on the regulated market, regulated markets are entitled to establish norms and requirements that:

a) oblige issuers to disclose information to the regulated market;

b) allow the market operator to verify whether the issuers in question comply with the requirements of the legislation related to the disclosure of information.

Article 67. Admission to trading on the regulated market of corporate securities

(1) The foreseeable stock market capitalization of the shares for which admission to trading on the regulated market is requested or, if it cannot be assessed, the issuer's own capital must be at least the equivalent in lei of one million euro calculated at the official exchange rate of the National Bank of Moldova on the date of admission.

(2) The value of the issue of debt securities for which admission to trading on the regulated market is requested must be at least the equivalent in lei of 200000 euro calculated at the official exchange rate of the National Bank of Moldova on the date of admission.

(3) The National Commission is entitled to decide on the admission to trading on the regulated market of shares that do not meet the requirements set out in paragraph (1) when it considers that the regulated market is an appropriate market for these securities.

(4) Securities shall be admitted to trading on a regulated market after the publication of a prospectus for the public offering.

(5) For admission to trading on the regulated market, corporate securities must meet the following conditions:

a) they are fully paid up;

b) according to the issuer's constitutive documents, they may be freely traded.

(6) For the admission to trading on the regulated market of shares of the same class of an issuer, it is necessary that the issuer's shares be in free float in the amounts established by the rules of the regulated market.

(7) The requirements set out in paragraph (5) letter a) and in paragraph (6) shall not apply if the corporate securities are to be placed through the regulated market.

(8) When issuing securities through a public offering, if the public offering is carried out in a manner other than that set out in paragraph (7), the admission to trading of these corporate securities may take place only after the end of the subscription period for these securities, except in cases of continuous issuance of debt securities.

(9) In the case of an additional issuance of corporate securities of a class previously admitted to trading, the regulated markets shall automatically admit to trading the securities of the additional issuance.

(10) In order to protect investors or ensure the proper functioning of the market, the National Commission is entitled:

a) to suspend the trading of securities admitted to the regulated market;

b) to require the regulated market to withdraw these securities from the regulated market.

(11) If the issuer fails to comply with the obligations related to the admission of securities to the regulated market, in addition to other penalty/sanction measures, the National Commission is entitled to make public the fact of the issuer's non-compliance with the obligations in question.

(12) The decisions of the National Commission regarding the suspension of trading or the withdrawal of financial instruments from the regulated market shall be brought to the attention of the regulated market and the public, in both cases indicating the reasons for the suspension or withdrawal.

(13) The issuer whose securities are admitted to trading on the regulated market must, at the time of its request or consent, transfer the keeping of the register of securities holders to the Central Depository before the start of trading of these securities on the regulated market.

(14) The regulated market is entitled to trade the securities of an issuer only if the register of the issuer's securities holders is kept at the Central Depository.

[Art.67 amended by Law no.33 of 16.03.2018, in force 06.04.2018]

[Art.67 supplemented by Law no.180 of 25.07.2014, in force 15.08.2014]

Article 68. Admission to trading on the regulated market of securities issued by the Ministry of Finance, the National Bank of Moldova, local public administration authorities and international public bodies

(1) Securities issued by the Ministry of Finance, the National Bank of Moldova, local public administration authorities and international public bodies (hereinafter in this article – authorities) may be admitted to trading on the regulated market only at the initiative of these authorities.

(2) The manner and conditions for admission to trading of securities issued by the Ministry of Finance and the National Bank of Moldova shall be established by the Ministry of Finance and, respectively, by the National Bank of Moldova, jointly with the National Commission.

(3) The manner and conditions for admission to trading of securities issued by local public administration authorities and international public bodies shall be established in accordance with the normative acts of the National Commission.

(4) Securities that, according to the decision of the authority in question, cannot be freely traded may not be admitted to trading.

(5) When issuing securities issued by authorities through a public offering, the admission to trading of these securities may take place only after the end of the subscription period for these securities.

Article 69. Trading of financial instruments on the regulated market

(1) The provisions regarding the trading of financial instruments and the execution of trading orders, included in the rules of the regulated market, as well as the procedures applied by the regulated market, shall ensure that:

a) financial instruments admitted to trading on the regulated market will be traded under fair, orderly and efficient conditions;

b) the determination of prices and the execution of trading orders will be carried out on objective and fair criteria;

c) securities admitted to trading on the regulated market may be freely traded;

d) transactions are carried out under safe conditions that guarantee the protection of investors' interests and the integrity of their financial instruments or monetary funds;

e) provide an orderly quotation and efficient settlement conditions for derivative financial instruments admitted to trading.

(2) The provisions regarding the rights of members and participants of the regulated market must ensure their access to information related to trading orders, to information regarding concluded transactions, to information on financial instruments admitted to trading and their issuers, and to other relevant information.

(3) The connection of the electronic trading system of the regulated market to the electronic system of the organization that administers clearing and settlement systems shall be carried out in such a way as to ensure the security, integrity and functionality of both systems.

Article 70. Suspension of trading and withdrawal of financial instruments

(1) Regulated markets are entitled to suspend trading or to withdraw financial instruments admitted to trading if they do not comply with the rules and requirements of the regulated market, except in cases where the suspension of trading or the withdrawal of financial instruments may significantly affect the interests of investors or may affect the normal and orderly operation of the regulated market.

(2) Any suspension of trading or withdrawal of financial instruments admitted to trading shall be immediately disclosed to the public and communicated to the National Commission, in both cases indicating the reasons for the suspension or withdrawal.

(3) The provisions of paragraph (1) do not affect the right of the National Commission to suspend trading and/or to withdraw financial instruments admitted to trading on a regulated market.

(4) The issuer is entitled to request the regulated market to suspend or withdraw the securities admitted to trading on the regulated market if these securities do not meet the requirements set out in Art. 67.

Article 71. Transparency requirements

(1) Until the trading of financial instruments admitted to trading, the market operator shall make public the information on the selling and buying prices according to the orders placed by the members and participants of the regulated market:

a) through its trading systems and/or according to the information procedures – to the members and participants of the regulated market;

b) according to its information procedures – to the general public; in this case, the information shall be provided continuously, within the normal trading program and under reasonable commercial conditions.

(2) After the trading of financial instruments admitted to trading, regulated markets shall disclose under reasonable commercial conditions and, as a rule, in real time the information on the price, volume and time of their trading:

a) through their trading and information systems – to the members and participants of the regulated market;

b) through their information systems – to the general public.

(3) The National Commission is entitled to exempt individually regulated markets from the obligation provided for in paragraph (1) and (2) in the cases established by the National Commission.

(4) Market operators may provide the relevant information or may ensure access to the internal information systems of the regulated markets to investment firms that are obliged to disclose the price of shares, in accordance with Art. 59, under reasonable and non-discriminatory commercial conditions.

(5) In addition to the requirements set out in paragraph (1)–(4), the market operator is obliged to make public, under non-discriminatory conditions:

a) the rules of the regulated market;

b) the list of members and participants of the regulated market;

c) the list of persons with qualified holdings of the market operator;

d) the list of financial instruments admitted to trading on the regulated market.

(6) Regulated markets shall submit to the National Commission reports on transactions carried out within these markets no later than the working day immediately following the day on which the transaction was carried out, in the manner established by the normative acts of the National Commission, and shall take the necessary measures to create the conditions for real-time supervision of the trading system by the National Commission.

Section 3 Multilateral trading systems (MTF)

Article 72. General provisions on MTF

(1) MTF may be created and operated by investment firms holding a category C license and by market operators (hereinafter – system operators), in accordance with the provisions of this law.

(2) System operators are entitled to create one or more MTFs.

(3) No natural or legal person, except the system operator, is entitled to use the phrases “MTF”, “trading system” and their derivatives, with reference to financial instruments in their own names, to the created trading systems, to their trademarks and promotional materials.

Article 73. MTF authorization

(1) The creation and operation of an MTF shall be carried out by the system operator based on the MTF authorization issued by the National Commission.

(2) To obtain the MTF authorization, the system operator shall submit to the National Commission an application in this regard, to which it shall attach documents confirming that the system operator cumulatively meets the following requirements:

a) has approved the MTF rules, drawn up in accordance with the provisions of Art. 74, which will be applied after authorization;

b) holds the resources and technical equipment necessary for the operation of the MTF;

c) has a trading system;

d) has a personnel structure that will ensure the operation of the MTF.

(3) The fee for issuing the MTF authorization is 10000 lei, which shall be paid into the budget of the National Commission by the system operator within no more than 10 days from the date of issuance of the authorization.

(4) The provisions of Art. 63 paragraph (2)–(8) and paragraph (10)–(12) shall apply accordingly in relation to MTF.

Article 74. MTF rules

(1) The MTF rules establish transparent, non-discriminatory and non-discretionary norms regarding:

a) the trading of financial instruments;

b) the determination of prices and the execution of trading orders;

c) the requirements and conditions for obtaining, suspending and withdrawing the status of member of the MTF by the system operator, as well as the rights and obligations of MTF members;

d) the types of financial instruments and the requirements for financial instruments and for the issuer for admission to trading, suspension of trading and withdrawal of financial instruments admitted to trading, as well as the rights and obligations of issuers of financial instruments admitted to trading;

e) the conditions for clearing and settlement of transactions with financial instruments carried out within the MTF;

f) the types of transactions and orders regarding financial instruments traded;

g) the operating regime of the MTF;

h) the conditions for examination and arbitration of disputes between members and/or participants of the MTF;

i) the conditions for examination of violations committed by members and participants of the MTF and by issuers whose financial instruments are admitted to trading.

(2) The MTF rules are adopted and amended by the system operator.

(3) The system operator is obliged to submit to the National Commission for coordination any amendments or additions to the MTF rules. The rules, amendments and/or additions thereto shall be applied only after their acceptance by the National Commission.

Article 75. Admission to trading within the MTF of financial instruments

(1) The provisions of Art.66 shall apply accordingly in relation to the MTF.

(2) Admission to trading within the MTF of financial instruments shall be carried out at the request of the issuer and other persons.

(3) Admission to trading within the MTF of financial instruments, at the initiative of persons other than the issuers of the financial instruments, does not oblige the system operator or the person who initiated the admission to inform the issuers concerned of this fact.

(4) The decision on admission to trading within the MTF of financial instruments shall be taken by the system operator.

(5) The provisions of this article shall apply to all financial instruments, with the particularities established in Art.76 and 77 for certain types of securities.

Article 76. Admission to trading within the MTF of corporate securities

(1) Admission to trading within the MTF of corporate securities shall be carried out at the request of the issuer and other persons.

(2) The provisions of Art.67 para.(5), (8)–(11) and of Art.75 para.(3) shall apply accordingly in relation to the MTF.

[Art.76 amended by Law no.62 of 08.04.2016, in force 06.05.2016]

[Art.76 supplemented by Law no.180 of 25.07.2014, in force 15.08.2014]

Article 77. Admission to trading within the MTF of securities issued by the Ministry of Finance, the National Bank of Moldova, local public administration authorities and international public bodies The provisions of Art.68 shall apply accordingly in relation to the MTF.

Article 78. Other requirements regarding the activity of the MTF The provisions of Art.69, 70 and 71 shall apply accordingly in relation to the MTF.

Section 4 Clearing and settlement

Article 79. Clearing and settlement of financial instruments

(1) The National Commission, jointly with the National Bank of Moldova, shall issue regulations on the manner of carrying out clearing and settlement of transactions with financial instruments circulating on the capital market.

(2) Transactions concluded on regulated markets and within the MTF shall be carried out mandatorily through the clearing and settlement systems of the central depository.

(3) The central depository, in accordance with its rules and procedures, as well as with the requirements of the acts issued by the authorities indicated in para.(1), is entitled to establish the financial instruments for which clearing and settlement will be carried out.

(4) The clearing and settlement systems shall admit as participants of the clearing and settlement system the parties to a transaction, market operators, system operators and other participants, in accordance with the provisions of the normative acts of the National Commission.

Article 80. Finality of settlements in the financial instruments settlement system

(1) Transfer orders entered into the clearing and settlement system are irrevocable and produce legal effects between participants and in relation to third parties from the moment of their entry into the system.

(2) Transfer orders and clearing are valid, produce legal effects and are enforceable against third parties in the event of insolvency proceedings against a participant of the system, provided that the transfer orders were entered into the clearing and settlement system before the moment of initiation of the insolvency proceedings.

(3) If the transfer orders are entered into the clearing and settlement system and are executed on the day of initiation of the insolvency proceedings, these transfer orders and clearing shall produce their legal effects and be enforceable against third parties, provided that the settlement agent, the organization and/or the organization administering the clearing and settlement system prove, after the moment of settlement, that they were not aware of the opening of the insolvency proceedings.

(4) No legislative act, no act subordinate to the law, no usage regarding the annulment of contracts and transactions concluded before the moment of initiation of the insolvency proceedings may lead to the annulment of transfer orders, clearing, payments and subsequent transfers.

(5) The moment of entry of a transfer order into the clearing and settlement system is determined in accordance with the operating rules of the system, established by the rules of the organization administering the clearing and settlement system.

(6) The transfer order may not be revoked by the participant of the system from the date or period established by the operating rules of the clearing and settlement system.

(7) For the purposes of this law, the moment of initiation of the insolvency proceedings is considered the moment when the court of law pronounces the respective decision.

(8) The court that decides to initiate the insolvency proceedings shall immediately communicate that decision to the National Commission, the regulated market and the MTF by fax, telephone message or electronic mail.

(9) The insolvency proceedings shall not have retroactive effect with regard to the rights and obligations of the participants in the clearing and settlement system arising as a result of their participation in the system prior to the initiation of the insolvency proceedings.

(10) After the initiation of the insolvency proceedings, the settlement agent, on behalf of and for the account of the participant, for the purpose of fulfilling the participant's obligations arising as a result of its participation in the system following the introduction of a transfer order prior to the initiation of the insolvency proceedings, shall use:

a) the monetary funds and financial instruments in the settlement account of the respective participant;

b) the funds of the Investor Compensation Fund.

(11) Any other patrimonial rights of the participant remaining after the performance of the participant's obligations arising as a result of its participation in the system following the introduction of a transfer order prior to the initiation of the insolvency proceedings may be used in the insolvency proceedings.

Section 5 Central Depository

Article 81. General provisions regarding the central depository

(1) The central depository is a legal entity that carries out the core and ancillary activities described in paragraphs (2) and (3). For the purposes of this law, the function of Central Depository, with the legal organizational form established by the Government, is held by the National Bank of Moldova for public interest entities that are financial institutions, and by the Ministry of Justice for public interest entities other than financial institutions.

(2) Within the territory of the Republic of Moldova, a Central Depository is entitled to carry out the following core activities, in accordance with its rules and the normative acts of the National Commission:

a) depository operations of financial instruments;

b) keeping the register of holders of securities of public interest entities;

c) clearing and settlement operations of financial instruments admitted to trading on a regulated market and/or an MTF;

d) other activities established by the National Commission.

(21 ) No entity may carry out the activities described in paragraph (2) letters a) – c) of this point, except the Central Depository.

(3) When depositing financial instruments in the name of the central depository, the provisions of Art. 47 paragraphs (2)–(7) shall apply accordingly to the central depository.

(31 ) In addition to the core activities established in paragraph (2) of this point, the Central Depository may carry out the following ancillary activities:

a) keeping the registers of holders of securities of companies that are not considered public interest entities;

b) other activities established by the National Commission.

(4) The provisions of Art. 80 shall apply to the central depository when performing clearing and settlement operations.

(5) Transactions with securities concluded on the regulated market and within the MTF may be carried out only with the depositing of the securities in the central depository. In the case of state securities traded on the regulated market and within the MTF, respective accounts may be opened for the central depository in the book-entry system at the National Bank of Moldova.

(6) Securities deposited in the central depository may not be pursued for the obligations of the central depository.

(7) The central depository may have accounts in the registers of the National Bank of Moldova.

(8) A public interest entity must transfer the keeping of the register of holders of securities to the Central Depository within one month from the date on which the issuer falls under the criterion of a public interest entity.

(9) Trading of the securities of a public interest entity (and all transfers that are not transactions with such securities) shall be suspended if the public interest entity does not transfer the keeping of the register of holders of securities to the Central Depository within the term established in paragraph (8).

(10) Issuers that are not considered public interest entities are entitled to transfer the keeping of their registers, of the holders of securities, to the Central Depository authorized in accordance with this Law.

[Art. 81 amended by Law no. 180 of 25.07.2014, in force 15.08.2014]

Article 82. Central depository license

(1) The central depository license shall be granted to a legal entity legally constituted in the legal organizational form of a joint-stock company and registered in the Republic of Moldova, which meets the requirements of this law.

(2) The central depository license, issued by the National Commission, contains the list of related activities that the central depository may carry out.

(3) To obtain the central depository license, the applicant shall submit to the National Commission an application in this regard, to which it shall attach documents confirming that the applicant cumulatively meets the following requirements:

a) has own capital in the amount of the equivalent in lei of at least 100000 euros calculated at the official exchange rate of the National Bank of Moldova one year from the date of entry into force of this law;

the lei equivalent of a minimum of 200000 euro calculated at the official exchange rate of the National Bank of Moldova 3 years after the date of entry into force of this law; the lei equivalent of a minimum of 350000 euro calculated at the official exchange rate of the National Bank of Moldova 5 years after the date of entry into force of this law; the lei equivalent of a minimum of 600000 euro calculated at the official exchange rate of the National Bank of Moldova 7 years after the date of entry into force of this law; the lei equivalent of a minimum of 1000000 euro calculated at the official exchange rate of the National Bank of Moldova 10 years after the date of entry into force of this law;

b) has an activity program, approved by decision of the competent body, which contains the applicant's organizational structure and the decision-making procedure;

c) has approved and coordinated with the National Commission the rules of the central depository, which meet the requirements set out in Art. 84 para. (1);

d) holds the necessary resources and technical equipment in accordance with the provisions of Art. 83 para. (2) lit. a) and b);

e) has a guarantee fund;

f) has a staffing structure that will ensure the activity of the central depository;

g) the members and managers of the central depository are confirmed by the National Commission and meet the requirements set out in para. (4) and (5);

h) has internal policies in accordance with Art. 83 para. (1).

(4) The effective management of the central depository is ensured by two persons (hereinafter in this article – managers). The managers are employees of the central depository under an individual employment contract. The managers are the persons who, according to the constitutive acts and/or the decision of the statutory bodies of the central depository, are empowered to coordinate its daily activity and are vested with the competence to engage the liability of the central depository. This category does not include persons who ensure the direct management of the departments within the central depository or its secondary offices.

(5) The members of the council and the managers of the central depository must cumulatively meet the following conditions:

a) have a good reputation, qualification and professional experience to achieve the proposed objectives and to create the premises necessary for carrying out the activity of the central depository, in accordance with the provisions of this law and the rules of the central depository, as well as to achieve a safe, prudent and transparent administration of the services provided by it, in order to protect the interests of investors;

b) have completed higher education and a professional experience of at least 5 years in the economic, financial-banking or capital market field;

c) not have valid sanctions, applied by the National Commission, the National Bank of Moldova or a similar body from abroad, prohibiting or suspending the person's right to operate on the capital or banking market;

d) not have been convicted by a final sentence for offences related to the activity carried out or for acts of corruption, money laundering, for offences against property, for abuse, taking or giving of bribes, forgery and use of forgery, embezzlement of funds, tax evasion or other acts likely to lead to the conclusion that the necessary premises for ensuring a sound and prudent management of the central depository are not created;

e) not have been administrators of a company that was in the process of judicial reorganization or was declared insolvent or whose license (authorization) was suspended or withdrawn by the competent authority during the exercise of the functions with which they were vested;

f) not be part of the management, not be administrators, employees or auditors and not hold any participation in another entity that performs the functions of a central depository;

g) not hold any public office;

h) hold a qualification certificate issued by the National Commission.

Article 83. Requirements regarding the activity of the central depository

(1) The central depository is obliged to develop and apply policies:

a) for identifying and managing conflicts of interest that may arise between the holders of shares in the share capital of the central depository or between its collaborators and the clients of the central depository;

b) for internal audit;

c) regarding the security, integrity and confidentiality of internal information;

d) regarding the identification and management of risks.

(2) The central depository is obliged:

a) to have the appropriate technical equipment to maintain the operation of the systems used;

b) to have the necessary resources to ensure orderly and continuous activity;

c) to develop and, if necessary, apply an emergency plan regarding data recovery in case of malfunctions and periodic testing of backup systems;

d) to carry out the mandatory audit of the financial-economic year at least once a year;

e) to carry out the technical audit of the information systems used at least once every two years.

(3) The records in the accounts opened in the name of investment companies are kept by the central depository, so as to ensure the separation of financial instruments held on its own behalf from those held on behalf of clients.

(4) The provisions of Art. 39 para. (4)–(6) and of Art. 40 are applied accordingly to the central depository.

Article 84. Rules of the central depository

(1) The central depository develops and applies the rules of the central depository, which establish transparent, non-discriminatory and non-discretionary norms regarding:

a) the manner of carrying out depository operations;

b) the conditions and requirements for the admission of financial instruments and of its members;

c) the manner of carrying out clearing and settlement operations, including regarding the finality of settlements and the transfer of ownership;

d) the types of transactions and financial instruments traded for which it performs clearing and settlement operations and the requirements for these;

e) the manner of keeping the register of holders of securities;

f) the presentation of reports to clients, issuers and holders of securities and other information disclosure rules;

g) the manner of carrying out other related activities requested to be indicated in the license;

h) the activity regime;

i) the manner of approval and amendment of the central depository's rules;

j) the conditions for the creation and use of the guarantee fund.

(2) The central depository's rules are adopted and amended by the central depository and apply after their acceptance by the National Commission.

(3) The National Commission is entitled to request the amendment of the central depository's rules at the time of submitting the application for obtaining the central depository license or subsequently if the rules do not comply with the provisions of para. (1) and/or if it considers that they do not ensure the conditions established in Art. 83 para. (1).

(4) If the provisions of para. (3) are not complied with, the National Commission is entitled to apply sanctions.

Section 6 Registry Companies

Article 85. General provisions regarding registry companies

(1) The registry company is the legal entity, authorized in accordance with this law, whose main activity is keeping the register of holders of securities and other related activities.

(2) The registry company is entitled to carry out the following activities:

a) keeping the registers of holders of securities of companies that are not considered public interest issuers;

b) consultancy and services regarding corporate relations.

(3) Registry companies carry out the activities specified in para. (2) exclusively on the capital market.

[Art. 85 amended by Law no. 180 of 25.07.2014, in force 15.08.2014]

Article 86. Registry company authorization

(1) To obtain a registry company authorization, the applicant must cumulatively meet the following requirements:

a) has the legal organizational form of a joint-stock company, legally constituted and registered in the Republic of Moldova;

b) has own capital and a guarantee fund in the amounts established by the normative acts of the National Commission;

c) has an activity program, approved by the decision of the competent body, which contains the organizational structure of the company, the decision-making manner;

d) the persons who manage the activity of the registry company meet the requirements established in Art. 39 para. (2);

e) has internal rules and the necessary resources in accordance with Art. 87.

(2) The registry company authorization is withdrawn if:

a) the withdrawal of the authorization is requested voluntarily by the registry company;

b) the authorization was obtained based on untrue information provided by the registry company;

c) serious and/or repeated violations of the provisions of this law or of the normative acts of the National Commission have been committed;

d) the violations found and their consequences have not been remedied within the deadlines established by the National Commission;

e) the registry company has unlawfully carried out other activities;

f) the branch and/or a representative office of the registry company has carried out activity without having the respective authorization;

g) the registry company is reorganized or dissolved;

h) the registry company has been declared insolvent by a court decision;

i) the registry company has ceased to comply with the requirements regarding the conduct of activity, provided by this law and by the normative acts of the National Commission.

(3) The manner of issuing the authorization is established in the normative acts of the National Commission.

(4) The registry company authorization is issued for a term of 5 years.

Article 87. Organizational requirements regarding registry companies

(1) Registry companies are obliged to develop and apply rules:

a) for identifying and managing conflicts of interest that may arise between the holders of shares in the share capital of the registry company and/or its employees, issuers, holders of securities and other involved persons;

b) regarding the security, integrity and confidentiality of internal information.

(2) Registry companies are obliged:

a) to have the appropriate technical equipment and appropriate electronic systems to ensure the correct and safe keeping of the records of holders of securities, as well as an orderly and continuous activity;

b) to ensure the security and confidentiality of the registers of holders of securities and related documentation;

c) to develop and, as the case may be, apply a contingency plan regarding data recovery in case of malfunctions and periodic testing of backup systems;

d) to carry out the audit of the financial-economic year at least once a year;

e) to carry out the technical audit of the information systems used at least once every two years.

(3) The provisions of Art. 39 para. (1)–(5) and Art. 140 para. (1), (3)–(7), (10)–(12) and (15) apply accordingly to registry companies.

(4) The requirements regarding technical equipment, information systems, premises, the amount of own capital and of the guarantee fund, the manner of making the registration upon the transfer of ownership in the registry keeping system, regarding the protection, security, integrity and confidentiality of information held by the registry company, as well as regarding the model contract for keeping the register, are established by normative acts of the National Commission.

Article 88. Keeping the register of holders of securities

(1) The register of holders of securities is kept based on the contract concluded with the issuer.

(2) The prices for the services provided by the registry company related to keeping the securities register shall be established in accordance with the regulations of the National Commission.

(3) The data from the register of securities holders may be presented by the registry company only to the persons listed below:

a) the extract from the register shall be presented to the securities holder, at their request, at the time of submitting the application for issuance of the extract;

b) the list of securities holders shall be presented to the persons established by Law No. 1134-XIII of 2 April 1997 on joint-stock companies;

c) the list of holders of shares, of securities convertible into shares or of securities granting the preferential right to purchase shares shall be issued to the offeror in the case of takeover offers;

d) any information and data from the register shall be presented to the authorized persons of the National Commission;

e) any information and data from the register shall be presented to law enforcement and investigative bodies in the cases established by law;

f) any information and data from the register shall be presented to judicial courts and enforcement offices based on their decision.

(4) Persons who have access to the information and data from the register in accordance with para. (3)

are obliged to ensure the security and confidentiality of the information obtained and bear liability in accordance with the legislation in force for failing to ensure the confidentiality of information and allowing unauthorized persons access to the information in question.

(5) Disclosure of information about the activity, about direct transfers of ownership over securities, recorded by the registry company, as well as about other operations carried out with the securities of issuers, shall be carried out in accordance with the normative acts of the National Commission. The National Commission is entitled to establish in its normative acts the manner, content and form of reporting.

Chapter V COLLECTIVE INVESTMENT UNDERTAKINGS IN SECURITIES Section 1 Activity of collective investment undertakings in securities (UCITS)

Article 89. General provisions

(1) UCITS are investment companies, constituted by acts of incorporation and investment funds, based on a civil society contract, which cumulatively meet the following conditions:

a) have as their sole purpose the mobilization of monetary resources and their placement in securities, in other financial instruments or in other assets in accordance with the provisions of this law;

b) the shares of investment companies and the fund units of investment funds are redeemable, at the request of the holders, from the assets of the respective UCITS.

(2) Any UCITS shall carry out its activity in accordance with the following principles:

a) the principle of prevention and management of risks related to the activity carried out;

b) the principle of diversification of the portfolio of securities or other assets held;

c) the principle of prudent management of the portfolio;

d) the principle of investor protection;

e) the principle of risk distribution.

(3) The investment company or the fiduciary investment management company that manages an investment fund may acquire foreign exchange through a type of loan

mutually covered (“back-to-back”) and/or may obtain loans and/or bank credits intended for the acquisition of immovable property necessary for carrying out their activity, provided that the value of these loans does not exceed 10% of the value of the assets of the investment company or of the investment fund.

(4) The investment company or the fiduciary investment management company that manages an investment fund shall request the approval of the National Commission for loans and/or bank credits contracted under the conditions of para. (3).

(5) The fiduciary investment management company may not charge fees from the UCITS it manages in connection with contracting/receiving such a loan and/or bank credit.

(6) UCITS may not grant loans to natural and legal persons.

(7) No fiduciary investment management company or depositary, acting on behalf of a UCITS, may grant loans from its assets or issue guarantees in favor of a third party based on the UCITS' assets.

(8) The prohibition provided for in para. (7) does not prevent the acquisition of financial instruments or other assets, in accordance with the investment policy, which are not fully paid at the time of acquisition.

(9) The shares of an investment company from additional issues shall be placed only through public offering in accordance with the provisions of this law. The fund units issued by an investment fund shall be subscribed by recording in the account of the respective fund their equivalent value, at the issue price.

(10) The placement price of the shares of an investment company or of the fund units of an investment fund shall be calculated based on the value of the net assets at the date of submission of the subscription application.

(11) UCITS have the obligation to redeem their shares or fund units at the express request of any holder.

(12) The redemption price of the shares of an investment company and of the fund units of an investment fund shall be calculated based on the value of the net assets at the date of receipt of the redemption application. Payment shall be made within at most 10 working days from the date of receipt of the respective application.

(13) In order to ensure the procedure for timely redemption of shares or fund units, UCITS shall form a placement guarantee fund, which is placed in highly liquid assets, its size being established by the National Commission.

(14) The fund units of UCITS may be issued and redeemed only in national currency.

(15) The requirements for the issuance and redemption of the shares of the investment company and of the fund units of the investment fund shall be established in the normative acts of the National Commission.

Article 90. Issuance of the prior authorization for the incorporation of UCITS

(1) UCITS may be incorporated on the basis of the prior authorization issued by the National Commission, in accordance with this law and with the regulations issued for its implementation.

(2) The investment company may obtain the prior authorization for incorporation provided that the incorporation documents are approved and submitted to the National Commission, the fiduciary investment management company is selected, if the investment company will not self-administer, the depositary is selected, and the draft prospectus and the investment policy are drawn up.

(3) An investment fund, after selecting the fiduciary management company, may obtain the prior authorization for incorporation provided that the rules of the investment fund (hereinafter – the fund rules) are approved, the depositary is selected and contracted, and the prospectus and the investment policy are drawn up and approved.

(4) The incorporation documents or the fund rules shall be prior authorized by the National Commission. All amendments and additions to the indicated documents shall be made with the prior authorization of the National Commission.

(5) The incorporation documents or the fund rules shall determine at least the following:

a) the methods of issuing, selling, redeeming and cancelling shares or fund units;

b) the method of calculating the net asset value and the net asset value per unit;

c) the obligations of the fiduciary investment management company, of the depositary and their liability to investors;

d) the conditions for terminating the contract with the fiduciary investment management company, with the depositary, the rules for ensuring investor protection in such situations;

e) the management fees charged by the fiduciary investment management company and the expenses that it is empowered to incur for the UCITS, as well as the methods of calculating them;

f) the method and the press body for informing the holders of shares or fund units.

(6) A UCITS shall not obtain the prior authorization for incorporation from the National Commission if the persons with management functions within it, as well as within the fiduciary investment management company and the depositary, do not have a good reputation, do not have qualifications, education and do not meet the requirements for persons with management functions established by the National Commission through its normative acts.

(7) At least 2 persons with management functions within the self-administering investment company and the fiduciary investment management company shall be subject to the conditions stipulated in para. (6).

(8) The persons with management functions of a UCITS shall be appointed with the prior consent of the National Commission.

(9) The term for issuing the prior authorization for the incorporation and registration of the documents of a UCITS or for the registration of the public offering of shares or fund units shall be at most 30 calendar days from the date of submitting the respective applications, accompanied by all the necessary documents, in accordance with the provisions of the normative act of the National Commission. In case of rejection of the application, the National Commission shall issue in writing a reasoned decision that may be challenged in the manner established by law.

Article 91. The prospectus

(1) The prospectus is a detailed and complex document, which contains the detailed presentation of all aspects of the UCITS' activity and is intended for persons interested in its activity. The prospectus includes a clear and accessible description of the risk profile of the UCITS.

(2) The fund rules or the incorporation documents form an integral part of the prospectus and shall be annexed thereto.

(3) The prospectus, provided that the information does not already appear in the fund rules or in the incorporation documents annexed to the prospectus, shall include at least:

a) the presentation of the UCITS with the description of the main activity characteristics;

b) the information regarding the policy promoted in the field of investments and the objectives to be achieved;

c) the economic information regarding the activity of the UCITS, as well as the information regarding taxes and duties, commissions and other possible expenses and payments;

d) the information regarding the possibility of buying and selling the shares and fund units, regarding the distribution of income to their holders;

e) the information regarding the redemption price of the shares or fund units;

f) other information in accordance with the regulations issued by the National Commission in this regard.

(4) The simplified prospectus contains the information specified in para. (3) letters a)–e), is part of the prospectus and may be detached from it.

(5) The simplified prospectus shall be offered free of charge to subscribers before subscription.

(6) Any person who subscribes to the shares of the investment company or the fund units of an investment fund shall give a declaration confirming that they have received, read and understood the prospectus.

(7) In order to ensure correct information of the public, if errors or inaccuracies have been found in the information included in the prospectus and/or if during the subscription period events have occurred that may affect the conduct of the offering, the UCITS, on its own initiative or at the request of the National Commission, shall amend the information in the prospectus and in the simplified prospectus. The amendments and additions to the prospectus shall be registered and published in the same manner as the prospectus, within at most 7 calendar days.

(8) The National Commission shall issue regulations regarding the content of the prospectus and of the simplified prospectus.

Article 92. The investment company

(1) The investment company shall be incorporated as a joint-stock company in accordance with Law No. 1134-XIII of 2 April 1997 on joint-stock companies.

(2) The investment company issues, in accordance with the provisions of this law and of Law No. 1134-XIII of 2 April 1997 on joint-stock companies, registered shares fully paid in cash at the time of subscription.

(3) An investment company may be managed by an investment fiduciary administration company, licensed in accordance with the provisions of this law, or by a board of directors, in accordance with the founding documents.

(4) The level of own capital of an investment company is established and calculated in accordance with the regulations of the National Commission.

(5) Self-managed investment companies comply accordingly with the provisions of this law applicable to investment fiduciary administration companies, as well as with the conditions established by the regulations of the National Commission.

(6) Investment companies shall mandatorily request, within 30 working days from the date of registration of the shares under the conditions of the law, the admission of their own shares to trading on a regulated market in the Republic of Moldova.

(7) The shares of an investment company are redeemed at any time, with the corresponding application of the provisions of Art. 89 para. (11)–(15).

(8) By derogation from the provisions of this law and of Law No. 1134-XIII of 2 April 1997 on joint-stock companies, the changes arising as a result of the issues and redemptions of shares during each financial year shall be registered, once a year, within a maximum of 30 days from the date of the annual general meeting of shareholders.

(9) The dissolution of the investment company takes place in accordance with Law No. 1134-XIII of 2 April 1997 on joint-stock companies and with the normative acts of the National Commission.

Article 93. General meeting of shareholders

(1) At least 30 days before the general meeting of shareholders, in the press organ indicated in the statute of the investment company, together with the notice regarding the convening of the general meeting of shareholders, the entire text of the resolution proposed for approval at the general meeting of shareholders shall be published.

(2) The matters proposed for approval at the general meeting of shareholders may not be modified and shall be submitted to voting at the general meeting of shareholders identically to the entire text of the matter published in accordance with the provisions of para. (1).

Article 94. Investment fund

(1) An investment fund represents the assets that are separate from the assets of the investment fiduciary administration company that manages this fund and belong to the holders of fund units of the fund.

(2) An investment fund may be established on the basis of a civil partnership contract only by an investment fiduciary administration company by adopting the fund rules and concluding a contract with a depositary regarding the provision of custody services.

(3) The investment fund has as its exclusive object of activity the placement of financial resources obtained exclusively through the issuance and sale to the public of fund units, in accordance with the provisions of this law and with the normative acts of the National Commission.

(4) The conditions that formed the basis of the prior opinion issued by the National Commission shall be maintained throughout the entire existence of the fund. Any modification thereof shall be approved by the National Commission within 10 working days.

(5) Accession to an investment fund is carried out on the basis of the written contract, concluded between a natural or legal person and the investment fiduciary administration company, which contains the agreement of the acceding person to the civil partnership contract of the fund and to the contract for the fiduciary administration of the fund's assets.

(6) Investment funds do not issue other financial instruments besides fund units.

Article 95. Fund units of the investment fund

(1) The fund unit is a financial instrument issued by the investment fund, which attests the right to an equal part of the net assets of the fund and grants the holder the following rights:

a) the right to request the redemption of the fund unit;

b) the right to a proportional share of the fund's patrimony, in the event of dissolution;

c) the right to the payment of a part of the net income of the fund, if this is stipulated in the fund rules.

(2) The fund units issued by the investment fund are of a single type – registered and confer equal rights to their holders. The fund units are paid in full at the time of subscription.

(3) Participation in an investment fund is attested by an extract from the register of fund unit holders issued by the person who keeps the register of fund unit holders.

(4) The value of a fund unit is equal to the value of the net assets of the fund divided by the number of fund units in circulation.

(5) The value of the fund unit at the establishment of the investment fund is established in the fund regulation and in the issue prospectus and is divided by 10 lei.

Article 96. Register of fund unit holders

(1) The register of fund unit holders is kept by the depositary of the fund.

(2) The requirements for the register of fund unit holders and for the manner of keeping it are established by normative acts of the National Commission.

(3) The extract from the register is issued to the fund unit holder and includes the following essential elements:

a) the name of the fund;

b) the name, registered office, state registration number (IDNO) and license number of the investment fiduciary administration company;

c) for natural persons – the surname and first name, personal identification number (IDNP), domicile;

d) for legal persons – the name, registered office and state registration number (IDNO);

e) the registration number and quantity of fund units;

f) the place and date of issuance of the extract;

g) the signature of the person who issued the extract from the register.

(4) The extract from the register is not a unit of the fund and its transfer from one person to another does not entail the transfer of ownership of the unit of the fund.

[Art.96 amended by Law no.160 of 07.07.2016, in force 16.09.2016]

Article 97. Subscription of the units of the fund of the investment fund

(1) The investor accepts the rules of the fund by concluding with the fiduciary investment management company a contract in the form provided by civil legislation and by the rules of the fund, in writing or in electronic format, with the application of the digital signature in accordance with the legislation on electronic documents and digital signature.

(2) The contract includes at least the following elements:

a) for natural persons – the name and surname, the personal identification number (IDNP), domicile;

b) for legal persons – the name, registered office and state registration number (IDNO);

c) the investor's declaration that he has become aware of the issue prospectus and the rules of the fund and has received the simplified prospectus;

d) the name of the fund;

e) the name and registered office of the fiduciary investment management company;

f) the investor's agreement to adhere to the civil partnership contract of the fund and to the contract for the fiduciary administration of the fund's assets.

(3) The placement price is established based on the value of the net assets of the fund, divided by the number of units of the fund in circulation, certified by the depositary and valid for the day on which the purchase is made.

(4) The investor pays the equivalent value of the subscribed unit of the fund based on a payment order into a special account of the fund opened with the bank – the depositary of the fund. The payment amount is converted into a number of units of the fund according to the acquisition value of one unit on the day the payment is executed.

(5) The depositary issues to the investor the extract from the register confirming the respective number of units within 3 working days from the date on which the payment was executed into the special account of the fund.

Article 98. Redemption of the units of the fund of the investment fund

(1) The holder of units of the fund of the investment fund has the right to request at any time the redemption of the units of the fund.

(2) The units of the fund are redeemed at the price established based on the value of the net assets of the investment fund, divided by the number of units of the fund in circulation, certified by the depositary and valid for the day on which the redemption request was submitted.

(3) The redemption request is submitted in written form or in another form determined by the rules of the fund and shall include at least the following elements:

a) for natural persons – the name and surname, domicile and personal identification number (IDNP);

b) for legal persons – the name, registered office and state registration number (IDNO);

c) the name of the fund;

d) the name and registered office of the investment fund management company;

e) the statement of the fund unit holder requesting the redemption of the value of the fund units held by them.

(4) For non-residents, similar data shall be indicated, confirmed by documents issued by the respective state, translated into the state language and notarized or apostilled under the law.

(5) The net asset value and the net asset value per unit of the investment fund shall be published weekly in the press body indicated in the fund rules by the investment fund management company, for each working day, based on data certified by the depository, as well as posted on the website of the investment fund management company.

(6) The redemption value of the fund unit shall be paid within 10 working days from the date of submission of the redemption request.

(7) The National Commission shall issue regulations regarding the method of calculating the net asset value and the net asset value per unit of the investment fund.

Article 99. Fund Rules

(1) The fund rules regulate the legal relations between the investment fund management company managing the fund and the fund unit holders. The fund rules enter into force after their approval by the National Commission and are posted on the website of the investment fund management company.

(2) In order to amend the fund rules, the investment management company obtains the prior approval of the National Commission.

(3) The application for prior approval is accompanied by:

a) the final text of the fund rules, with the proposed amendments highlighted;

b) the draft text of the notification to fund unit holders, with an explanation of the effect of the amendments on existing fund unit holders.

(4) The National Commission approves the amendment of the fund rules in the following cases:

a) the content of the rules and other accompanying documents complies with the provisions of this law and of the normative acts issued for its implementation; and

b) it finds that the amendment of the investment fund policy is justified in terms of content and timing and does not prejudice the rights of fund unit holders.

(5) After receiving the prior approval from the National Commission, the investment management company publishes the text of the amended rules in the press organ indicated in the fund rules, on its own website, and sends fund unit holders a notification to this effect.

Article 100. Activity of the investment management company

(1) In managing the fund's assets, the investment management company acts in accordance with the fund rules, the normative acts establishing the professional rules for managing financial investments, as well as this law, taking into account the interests of fund unit holders and being liable to them for damages caused by actions contrary to the aforementioned rules.

(2) The fiduciary investment management company has the right to charge an annual management fee, at a rate provided by the fund's rules, calculated as a percentage of the average annual value of the income brought to unit holders for the services of managing the fund's assets.

The management fee is paid from the fund's assets.

(3) The fiduciary investment management company does not have the right to accept payment for the fund's units if it does not hold an operating license issued by the National Commission under the conditions of this law.

Article 101. Expenses of the investment fund and expenses of unit holders

(1) The total expenses of the investment fund include the management fee and other payments from the fund's assets, in particular, for the payment of depositary services. The total expenses are calculated by the fiduciary investment management company in accordance with the normative acts of the National Commission.

(2) The expenses of a unit holder are the total expenses that this holder bears upon the purchase of the fund's units and throughout the entire period of holding them, until receiving the redemption value for the units held.

(3) The fiduciary investment management company is obliged to establish in the fund's rules and in the fund's issue prospectus, to publish in the press organ indicated in the fund's rules and to place on its own web page information regarding:

a) the types of expenses borne by the fund;

b) the total expenses of the fund and of the unit holder for the previous year, expressed as a percentage of the value of the fund's net assets;

c) the total expenses of the fund and of the unit holder for the current year, expressed as a percentage of the value of the fund's net assets;

d) the minimum amount of expenses borne by an investor in the case of holding one fund unit.

Article 102. Dissolution of the investment fund

(1) The procedure for the dissolution of the investment fund is initiated if:

a) the transfer of the management of the fund's assets from one fiduciary investment management company to another fiduciary investment management company cannot be carried out;

b) the value of the monetary means attracted from the fund's unit holders does not reach the level of one million lei within one year from the date when the first issue prospectus was registered with the National Commission;

c) the value of the monetary means attracted from the fund's unit holders falls below the level of one million lei and does not exceed this level in the following 6 months.

(2) The fiduciary investment management company informs the National Commission about the initiation of the dissolution of the investment fund and about its cause no later than the day immediately following the day on which the respective cause occurred. The given information shall be accompanied by the text of the communication for the unit holders and by the text of the notice to be published in the Official Gazette of the Republic of Moldova.

(3) The fiduciary investment management company, within 7 working days from the date of initiation of the procedure for the dissolution of the investment fund, publishes a notice in the Official Gazette of the Republic of Moldova and informs the unit holders about the initiation of the fund's dissolution and about its legal consequences.

(4) Upon the occurrence of the cause for initiating the dissolution of the investment fund, the unit holders cannot request the redemption of the fund units held, and the requests received by the fiduciary investment management company after the occurrence of this cause have no legal effect.

(5) Upon the occurrence of the cause for the dissolution of the investment fund, investors can no longer accept the fund's rules, and the contracts concluded by the fiduciary investment management company after the occurrence of this cause have no legal effect.

(6) Upon the occurrence of the cause for the dissolution of the investment fund, the fiduciary investment management company collects the fund's management fee, but only after reimbursing the liquidation value to the unit holders.

(7) After the occurrence of the cause for initiating the dissolution of the investment fund, the unit holders have the right to receive the liquidation value proportional to the number of fund units held.

(8) The fiduciary investment management company sells the assets of the investment fund through transparent methods, with exposure for sale within auctions on a regulated market. After the initiation of the fund's dissolution procedure, the fiduciary investment management company may conclude, in the name and on account of the fund, only those commercial transactions that are necessary to sell the fund's assets.

(9) When selling the fund's assets, the fiduciary investment management company is based on the principle of protecting the investor's interests.

Article 103. "Master-feeder" structures

(1) A "feeder" UCITS is a UCITS authorized to invest, by way of derogation from

art.112, at least 85% of its assets in shares or in units of another UCITS (a "master" UCITS).

(2) A "feeder" UCITS may hold up to 15% of its assets in the form of:

a) liquid assets and financial derivative instruments, in accordance with the regulations of the National Commission;

b) movable and immovable property that are indispensable for the direct conduct of the activity, if it is an investment company.

(3) A "feeder" UCITS calculates its global exposure related to holding financial derivative instruments, in accordance with the manner established in the regulations of the National Commission.

(4) A "master" UCITS is a UCITS that:

a) has at least one "feeder" UCITS among its holders of shares or units;

b) it must not itself be a "feeder" UCITS; and

c) it must not hold shares or units of a "feeder" UCITS.

(5) If a "feeder" or "master" UCITS is established in another state, it receives the acceptance of the National Commission in the manner established in Art. 36.

(6) A "master" UCITS is obliged to provide the "feeder" UCITS with all documents and information necessary for it to meet the requirements established in this law. For this purpose, the "feeder" UCITS concludes an agreement with the "master" UCITS. The "feeder" UCITS has no right to invest in shares or units of the "master" UCITS until the agreement enters into force. That agreement is available, upon request and free of charge, to all holders of shares or units.

(7) If the "master" UCITS and the "feeder" UCITS are managed by the same fiduciary investment management company, the agreement may be replaced by internal rules of conduct ensuring compliance with the requirements provided by this law.

(8) The "master" UCITS and the "feeder" UCITS take the necessary measures to coordinate the schedule for calculating and publishing the value of their net assets and the net asset value per unit.

(9) The National Commission approves regulations on the measures mentioned in paragraph (3), the content of the agreement or of the internal rules of conduct mentioned in paragraphs (6) and (7), as well as the content of the prospectus.

(10) If the "master" UCITS and the "feeder" UCITS have different depositaries or auditors, the depositaries/auditors concerned conclude an agreement on the exchange of information, with the aim of ensuring the fulfilment of obligations by both depositaries/auditors. Until that agreement enters into force, the "feeder" UCITS do not invest in shares or units of the "master" UCITS.

(11) If a UCITS intends to carry out activities as a "feeder" UCITS of another "master" UCITS, the "feeder" UCITS provides the holders of shares or units, no later than 30 days before the date on which the "feeder" UCITS is to invest in the "master" UCITS, with information regarding this investment, attaching the prospectus, as well as a statement certifying that the holders of shares or units have the right to request, within 30 days, their redemption, without other charges than those charged by the UCITS to cover decapitalization costs. That right arises from the moment when the "feeder" UCITS has provided the information mentioned in this paragraph.

(12) The National Commission issues regulations:

a) on the format and manner of transmitting the information mentioned in paragraph (11);

b) if the "feeder" UCITS transfers all or part of its assets to the "master" UCITS in exchange for shares or units, on the procedure for valuation and control of such a contribution in kind, as well as the role of the depositary of the "feeder" UCITS in that process.

(13) The "feeder" UCITS effectively monitors the activity of the "master" UCITS. In fulfilling this obligation, the "feeder" UCITS may rely on the information and documents received from the "master" UCITS or, as the case may be, from its fiduciary investment management company, depositary or auditor, except where there are grounds for doubt regarding the accuracy of this information and these documents.

(14) The "master" UCITS informs the National Commission of the identity of each "feeder" UCITS that invests in its shares or units.

(15) The "master" UCITS does not charge subscription or redemption fees from the "feeder" UCITS for the purchase or sale of shares or units of that "master" UCITS.

(16) The "master" UCITS guarantees that all information necessary in accordance with the legislation in force, the rules of the fund or the constitutive acts is provided in due time to the "feeder" UCITS or, as the case may be, to its fiduciary investment management company, as well as to the National Commission, the depositary and the auditor of the "feeder" UCITS.

(17) The National Commission informs without delay the "feeder" UCITS of any decision, measure, any finding of non-compliance with the conditions of this law or of the acts issued for its application, concerning the "master" UCITS or, as the case may be, concerning its fiduciary investment management company, depositary or auditor.

Section 2 The fiduciary investment management company

Article 104. Competence of the fiduciary investment management company

(1) The fiduciary investment management company has the following duties:

a) provides services for the establishment and organization of the activity of the investment fund;

b) manages the assets of the UCITS in accordance with this law and the normative acts of the National Commission;

c) provides investment consulting services related to the management of the UCITS' assets;

d) provides services for the issuance and sale of units of the managed investment funds;

e) keeps the accounting records, prepares financial statements and specific reports of its own and of the managed UCITS;

f) carries out investments on behalf of the managed UCITS, using the financial resources attracted as a result of the placement of shares or units;

g) presents the financial statements and specific reports and publishes information on the results of the activity of the managed UCITS;

h) ensures the keeping of the register of holders of shares and of holders of units of the managed UCITS;

i) exercises the rights related to the holding of securities in the name and on behalf of the managed UCITS;

j) calculates and publishes the net asset value, the net asset value per unit and the number of investors of the UCITS administered;

k) performs other tasks necessary for the correct and efficient administration of the assets of the UCITS with which it has concluded an investment fiduciary administration contract.

(2) The investment fiduciary administration company is entitled to carry out only the activities provided for by this law and by the normative acts of the National Commission.

(3) The investment fiduciary administration company has the right to charge an annual administration fee, at a rate provided for by the constitutive acts or by the rules of the fund, calculated as a percentage of the average annual value of the income brought to the holders of shares or fund units for the asset administration services of the UCITS. The administration fee shall be paid from the assets of the investment company or of the fund.

Article 105. Obligations of the investment fiduciary administration company. Restrictions regarding the investment fiduciary administration company

(1) The investment fiduciary administration company is obliged:

a) to act with maximum professional diligence, fairness and transparency in the exclusive interest of the holders of shares and fund units of the administered UCITS;

b) in the administration of the assets of the UCITS, to comply with the principles listed in art. 89 para. (2);

c) to adopt measures to protect the rights of the holders of shares and fund units of the administered UCITS;

d) to respect and comply with the prudential regulations of the National Commission.

(2) The investment fiduciary administration company is not entitled:

a) to be a party to transactions carried out with the assets of the administered UCITS and to intermediate transactions between them;

b) to contract loans and/or bank credits other than those provided for by this law and by the normative acts of the National Commission;

c) to conclude transactions with investment companies that hold shares greater than 5% of the share capital of the respective investment fiduciary administration company;

d) to hold, directly or indirectly, individually or together with persons with whom it has close links, a share greater than 5% of the share capital of another investment fiduciary administration company;

e) to hold, directly or indirectly, individually or together with persons with whom it has close links, a share greater than 5% of the share capital of a depositary;

f) to hold shares or social parts of legal persons who are shareholders of the respective investment fiduciary administration company.

(3) The provisions of para. (2) lit. c) shall also apply in situations where the members of the board of directors, of the executive body and the holders of a share greater than 5% of the share capital of the legal persons holding licenses issued under the conditions of this law, directly or indirectly, individually or together with persons with whom they have a family relationship and/or with whom they have close links, hold shares greater than 5% of the share capital of the investment fiduciary administration company.

(4) The provisions of para. (2) lit. d) shall also apply to the members of the board of directors, the executive body and the holders of a share greater than 5% of the share capital of an investment fiduciary administration company.

(5) The investment fiduciary administration company cannot be at the same time also a depositary of a UCITS and must not be a person with whom the UCITS has close links. The investment fiduciary administration company and the depositary must act independently of each other and exclusively in the interest of the holders of shares and fund units of the administered UCITS.

(6) The investment fiduciary administration company has the obligation to transmit to the depositary all information regarding the operations carried out with the assets of the UCITS no later than 16:00 of the working day immediately following the one in which these operations were carried out.

(7) The investment fiduciary administration company is obliged to transmit to the depositary for record-keeping and safekeeping the assets of the administered UCITS, by transmitting all documents concerning the administered patrimony.

Article 106. The investment fiduciary administration contract

(1) The investment fiduciary administration contract may be concluded only after receiving the positive opinion of the National Commission.

(2) The investment fiduciary administration company shall terminate the investment fiduciary administration contract of the UCITS in the following cases:

a) at the request of one of the parties and only after informing the National Commission of the decision to terminate the investment fiduciary administration contract at least 60 days before the decision takes effect;

b) following the withdrawal by the National Commission of the license as a result of the violation of the provisions of this law.

(3) The investment fiduciary administration company has the obligation to publish in the Official Gazette of the Republic of Moldova and in a newspaper with national circulation the decision to terminate the investment fiduciary administration contract within 7 days from the date of informing the National Commission.

(4) Within 5 days from the date of termination of the contract with the administered UCITS, the investment fiduciary administration company shall transmit to the successor investment fiduciary administration company all documents concerning the administered patrimony.

Section 3 The Depositary

Article 107. General provisions

(1) The assets belonging to a UCITS shall be transmitted to a depositary, by transmitting the documents confirming their ownership, for the purpose of record-keeping and safekeeping under safe conditions.

(2) The depositary may carry out its activity only on the basis of the contract for the provision of depositary services (hereinafter – depositary contract) concluded with the fiduciary investment management company or with the self-managed investment company.

(3) The depositary is obliged to inform the National Commission, the fiduciary investment management company and the UCITS, at least 60 days in advance, about the termination of the performance of the obligations provided for in the depositary contract.

(4) The UCITS is not permitted to publish and use other measures for expressing the value of the net asset, the value of the net asset per unit and the number of holders of shares or fund units than those certified by the depositary.

(5) The depositary keeps the records of the UCITS' assets in separate accounts, different from its own records accounts.

Article 108. Activities carried out by the depositary

(1) The depositary carries out the following activities:

a) keeps the records of the UCITS' assets and safekeeps these assets;

b) calculates and certifies the value of the net asset, the value of the net asset per unit, the number of investors and transmits these data to the fiduciary investment management company and the National Commission in the form and with the periodicity established by this law and by the normative acts of the National Commission;

c) operates changes in the records regarding the UCITS' assets in accordance with the instructions and confirmatory documents received from the fiduciary investment management company and with the existing regulations.

(2) The depositary takes all necessary measures to ensure that the issue and redemption prices of the shares of the investment company and of the fund units of the investment fund are calculated in accordance with the regulations of the National Commission.

Article 109. Obligations of the depositary

(1) The depositary has the following obligations:

a) to monitor the carrying out of the activities of issuing, selling, redeeming or cancelling shares or fund units, in accordance with this law and with the normative acts issued for its application;

b) to calculate the value of the shares or fund units in accordance with this law, with the regulations of the National Commission, as well as with the constitutive acts, the fund rules and the investment policy of the UCITS;

c) to fulfil the instructions of the fiduciary investment management company, except when these are contrary to the legislation in force or to the UCITS' regulations;

d) to monitor the transactions carried out with the UCITS' assets;

e) to immediately inform the National Commission about any abuse of the fiduciary investment management company or of the self-managed investment company in relation to the UCITS' assets.

(2) The depositary does not have the right to hold, directly or indirectly, individually or together with the persons with whom it has close links, shares of a fiduciary investment management company or of a self-managed investment company, with which it has concluded a depositary contract.

Article 110. Liability of the depositary

(1) The depositary is liable towards the UCITS and towards the holders of shares of the investment company or holders of fund units of an investment fund, with which it has concluded depositary contracts, for any loss suffered by them as a result of the non-performance or improper performance of its obligations.

(2) The depositary's liability towards investors may be invoked by them, directly or indirectly, through the fiduciary investment management company, depending on the nature of the relations between the three parties.

Article 111. Termination of the depositary contract

(1) The depositary contract may be terminated in the following situations:

a) at the request of one of the parties and only after informing the National Commission about the decision to terminate the depositary contract at least 60 days before the decision takes effect;

b) following the withdrawal of the licence by the National Commission in accordance with the provisions of this law and/or the withdrawal of the licence by the National Bank of Moldova.

(2) The depositary is obliged to publish in the Official Gazette of the Republic of Moldova and in a newspaper of national circulation the decision to terminate the depositary contract within 7 days from the date of informing the National Commission.

(3) Within 5 days from the date of termination of the contract with the serviced UCITS, the depositary transmits to the successor depositary all the records regarding the UCITS' patrimony, as well as the documents confirming its holding.

(4) The fiduciary investment management company or the self-managed investment company may change the depositary only after receiving the positive opinion of the National Commission.

Section 4 Investment policy of the UCITS

Article 112. Investments of the UCITS

(1) The UCITS' investments are made exclusively in the following assets:

1) in securities and money market instruments admitted to trading on a national regulated market;

2) in securities and money market instruments admitted to trading on a regulated market of a member state of the European Union or of a third country, which operates regularly and is recognised and open to the public, provided that the choice of the regulated market is approved by the National Commission or is provided for in the fund rules or in the constitutive acts, endorsed by the National Commission;

3) in newly issued securities, whose issue conditions include a firm commitment, according to which admission to trading on a national regulated market or of a member state of the European Union which operates regularly and is recognised and open to the public will be requested and which is to be approved by the National Commission or is to be provided for in the fund rules or in

the constitutive documents approved by the National Commission. The aforementioned admission shall be obtained no later than before the end of one year from the issue;

4) in participation securities of UCITS authorised in a Member State of the European Union, subject to the cumulative fulfilment of the following conditions:

a) they are subject to prudential supervision, and cooperation between the National Commission and the competent authority of the home state is sufficiently ensured;

b) the level of protection guaranteed to holders of shares or units of the UCITS in which the investment is to be made is equivalent to that ensured to holders of shares or units of a UCITS under this law;

c) the activities of the UCITS are subject to half-yearly and annual reports, which allow an assessment of assets and liabilities, income and operations during the reporting period;

d) the UCITS in which the investment is intended to be made may not, in turn, invest, in accordance with the rules of the fund or the constitutive document, more than 10% of their assets in other collective investment undertakings;

5) deposits constituted with financial institutions, which are repayable on demand or offer the right of withdrawal, with a maturity not exceeding 12 months;

6) derivative securities, including those involving the final settlement of cash funds, traded on a regulated market within the meaning of items 1) and 2), or negotiated outside the regulated market, subject to the cumulative fulfilment of the following conditions:

a) the underlying asset consists of instruments provided for in this paragraph, in financial indices, interest rates and exchange rates, in which the UCITS may invest in accordance with its investment policy, in the manner provided by the rules of the fund or in the constitutive documents;

b) the counterparties are institutions subject to prudential supervision, and cooperation between the National Commission and the competent authority of the home state is sufficiently ensured;

7) money market instruments, other than those traded on a regulated market, which are liquid and have a value that can be determined precisely at any time, provided that the issue or the issuer is subject to regulations concerning the protection of investors and their savings and provided that these instruments are:

a) issued or guaranteed by a public administration authority, central or local, of the Republic of Moldova, by the National Bank of Moldova, in the cases and under the conditions provided by its normative acts, or by an administrative authority, central or local, or by a central bank of a Member State of the European Union, by the European Central Bank or by the European Investment Bank or by an international public body of which one or more Member States are part;

b) issued by a body whose securities are negotiated on the regulated markets referred to in items 1) and 2);

c) issued or guaranteed by an entity subject to prudential supervision, in accordance with the criteria defined by Community legislation, or by an entity that is subject to and complies with prudential rules considered by the National Commission to be at least as strict as those provided by Community legislation.

(2) Where, for the purpose of making the investments referred to in paragraph (1), it is necessary to obtain the authorisation of the National Bank of Moldova in accordance with the provisions of Law No. 62-XVI of 21 March 2008 on currency regulation, these authorisations must be obtained before the respective investments are made.

(3) The limits regarding the type of instruments in which the investment is to be made and the maximum share of investments for a certain category shall be established by regulations of the National Commission.

(4) The distribution or reinvestment of the income of a UCITS shall be carried out in accordance with the provisions of this law, of the rules of the fund or of the constitutive document.

Article 113. Risk management system

(1) The investment management company and the self-managed investment company shall use a risk management system that enables them:

a) to monitor and quantify at any time the risk associated with positions and the influence of positions on the overall risk profile of the portfolio;

b) to ensure a correct and independent valuation of the value of derivative financial instruments negotiated outside the regulated market.

(2) The investment management company and the self-managed investment company shall communicate quarterly to the National Commission, in accordance with its regulations, the types of derivative securities, the risk of the underlying assets, the quantitative limits and the methods chosen to estimate the risk associated with transactions in derivative securities, for each UCITS managed.

Section 5 Protection of holders of shares of the investment company and of units of investment funds

Article 114. Rules on transparency and publicity

(1) A UCITS is obliged to inform the public about its activity in the manner and within the time limit established by this law and by the normative acts of the National Commission.

(2) A UCITS is obliged to submit to the National Commission, to publish in the press body indicated in the constitutive documents or in the rules of the fund and to display on its own web page the specific annual and half-yearly reports on the activity carried out.

(3) The dissemination of any advertising material relating to a UCITS shall be permitted only in accordance with the provisions of Law No. 1227-XIII of 27 June 1997 on advertising, with the regulations of the National Commission on the content and structure of advertising material, in order to ensure the transparency and correctness of information.

(4) Any advertising material shall mention the existence of the issue prospectuses, as well as the manner of obtaining them.

(5) A feeder UCITS shall indicate in all relevant advertising information that it invests at least 85% of its assets in shares or in units of funds issued by a master UCITS.

(6) A feeder UCITS shall send to investors, upon request and free of charge, a printed copy of the prospectus and of the specific annual and semi-annual reports on the activity carried out of the master UCITS.

(7) The fiduciary investment management company, for each UCITS administered, and the self-managed investment companies shall publish in the press body indicated in the incorporation documents or in the fund rules, place on their own web page and transmit to the National Commission the following documents:

a) the issue prospectuses;

b) the simplified prospectuses;

c) the specific annual and semi-annual reports on the activity carried out;

d) the periodic reports on the net asset value and the unit net asset value calculated in accordance with the regulations of the National Commission.

(8) The reports on the net asset value and the unit net asset value shall be filed with the National Commission, published in the press body indicated in the incorporation documents or in the fund rules and placed on the web page within the terms and conditions established by the normative acts of the National Commission.

(9) The specific annual and semi-annual reports on the activity carried out shall be submitted to the National Commission, published in the press body indicated in the incorporation documents or in the fund rules and placed on the web page within the following term:

a) the own specific semi-annual reports on the activity carried out for the first semester – within 30 days following the management semester;

b) the own and consolidated specific annual reports on the activity carried out – within 120 days following the management year.

(10) The specific annual and semi-annual reports on the activity carried out shall be provided free of charge, upon the request of investors, and shall be made available to them in the places provided in the issue prospectus and in the simplified prospectus.

(11) The specific annual report on the activity carried out shall contain the annual financial statements, as well as other significant information, which shall support investors in assessing, in full knowledge of the facts, the activity of the UCITS and its results.

(12) The specific annual and semi-annual reports on the activity carried out shall include the information provided in the regulations of the National Commission.

(13) The annual financial statements shall be subject to mandatory audit.

(14) In its audit report, the auditor of the feeder UCITS shall take into account the audit report of the master UCITS. The auditor of the feeder UCITS shall include in the report any irregularities signaled in the audit report of the master UCITS, as well as their impact on the feeder UCITS.

(15) The specific annual report on the activity carried out of the feeder UCITS shall also include a statement regarding the total expenses of the feeder UCITS and of the master UCITS.

(16) The specific annual and semi-annual reports on the activity carried out of the feeder UCITS shall specify the modalities by which the specific annual and, respectively, semi-annual reports on the activity carried out of the master UCITS may be obtained.

Article 115. Protection of investors' rights

(1) In order to protect the interests of investors, the self-managed investment companies and the fiduciary investment management companies acting on behalf of a UCITS may temporarily suspend the redemption of shares and units of funds, in compliance with the provisions of the fund rules, of the incorporation document and with the agreement of the National Commission.

(2) For the protection of the public interest and of investors, the National Commission may decide the temporary suspension or limitation of the issue and/or redemption of shares and units of funds of a UCITS.

(3) The suspension act shall specify the terms and the reason for the suspension. The suspension may be extended also after the expiration of the term initially established if the reasons for the suspension persist.

(4) In the situations mentioned in para. (1), the UCITS shall communicate, without delay, its decision to the National Commission in order to obtain the agreement.

(5) If the influence exercised by the holders of qualified participation, the members of the board of directors, the managers or the personnel of the internal control department of the fiduciary investment management company or of the self-managed investment company risks to prejudice the administration of a UCITS, the National Commission shall adopt measures for the suspension of the activity or the withdrawal of the license of the fiduciary investment management company or of the self-managed investment company.

(6) If a master UCITS temporarily suspends the redemption or subscription of its shares or units of funds, either on its own initiative, or at the request of the National Commission or of another competent authority, each of its feeder UCITS shall have the right to suspend the redemption or subscription of its shares or units of funds during the same period as the master UCITS.

Section 6 Reorganization of UCITS

Article 116. Reorganization of UCITS

(1) The merger and division of the fiduciary investment management company, of the UCITS shall be carried out in accordance with the civil legislation, with Law no. 1134-XIII of 2 April 1997 on joint-stock companies, the Competition Law no. 183 of 11 July 2012 and with the regulations of the National Commission.

(2) Participants in the reorganization of UCITS through merger or absorption may only be UCITS.

(3) Upon the reorganization of UCITS through division or separation, only UCITS may be created.

(4) A UCITS is not entitled to reorganize through transformation into other forms of legal organization.

(5) If a “master” UCITS merges with another UCITS or if it is split into two or more UCITS, the “feeder” UCITS shall be liquidated, unless the National Commission approves that the “feeder” UCITS:

a) continues to be a “feeder” UCITS of the “master” UCITS or of another UCITS following the merger or the split of the “master” UCITS; or

b) invests at least 85% of its assets in shares or in fund units of another “master” UCITS that does not result from the merger or from the split; or

c) amends its fund rules or instruments of incorporation in order to transform into a UCITS that is not a “feeder” UCITS.

(6) No merger or split of a “master” UCITS shall enter into effect unless the “master” UCITS has transmitted to all of its holders of shares or fund units and to the National Commission useful and accurate information regarding the merger or the split at the latest 60 days before the proposed date for entering into effect.

(7) If a “master” UCITS is liquidated, the “feeder” UCITS shall also be liquidated, except when the National Commission approves:

a) the investment of at least 85% of the assets of the “feeder” UCITS in shares or in fund units of another “master” UCITS; or

b) the amendment of the fund rules or of the instruments of incorporation so that the “feeder” UCITS can transform into a UCITS that is not a “feeder” UCITS.

(8) The liquidation of a “master” UCITS cannot be carried out earlier than 3 months from the date on which the “master” UCITS informed all of its holders of shares or fund units and the National Commission regarding the decision to liquidate.

(9) The National Commission issues regulations regarding the approval procedures in case of liquidation, merger or split of a UCITS.

Article 117. Joint-stock companies whose activity contains the characteristics of the activity of a UCITS

(1) The joint-stock company whose activity cumulatively meets the conditions specified in Art. 89 para. (1), but which does not have a concluded contract with an investment fiduciary management company or does not hold a license for this type of activity issued by the National Commission or its decision regarding the fact that its activity does not represent UCITS activity, is obliged to suspend its activity on the capital market until obtaining the license from the National Commission or the opinion certifying that its activity does not represent UCITS activity.

(2) Non-execution of the provisions of para. (1) constitutes grounds for the dissolution of the company in accordance with Art. 97 of Law No. 1134-XIII of 2 April 1997 on joint-stock companies.

Chapter VI INVESTOR PROTECTION Section 1

Disclosure of information

Article 118. General provisions regarding the disclosure of information

(1) The provisions of this chapter do not apply to:

a) central and local public administration authorities;

b) companies that have issued Moldovan depositary receipts;

c) issuers that are not considered public interest entities.

(2) If this law does not expressly provide the manner in which information is to be made public, the respective information is considered made public if it has been disclosed:

a) in one or more newspapers with national circulation; and/or

b) in electronic form on its own web page; and/or

c) by distributing it to a press and/or information agency, provided that the latter will disclose it publicly; and/or

d) in the text of a decision of a public administration authority, which is to be published in the Official Gazette of the Republic of Moldova.

(3) Any information made public in accordance with the requirements established in Art. 125 is presented simultaneously also to the National Commission.

(4) The National Commission issues normative acts regarding the creation and maintenance of the activity of official mechanisms for storing information made public in accordance with the provisions of this chapter.

(5) Issuers of securities admitted to trading on a regulated market or within an MTF are obliged to ensure equal treatment with regard to the disclosure of information for all holders of securities who are in an identical situation. The disclosure of information is carried out in accordance with this law, with Law No. 1134-XIII of 2 April 1997 on joint-stock companies and with the normative acts of the National Commission.

[Art. 118 amended by Law No. 180 of 25.07.2014, in force 15.08.2014]

Article 119. Disclosure of information by issuers

(1) An issuer that is considered a public interest entity shall publish:

a) the annual report of the issuer;

b) the half-yearly report of the issuer;

c) the interim statements of the issuer's management;

d) information about events that affect the economic-financial activity of the issuer;

e) the issuer's instruments of incorporation.

(2) In order to protect the interests of investors or ensure the proper functioning of the market, the National Commission is entitled to require the issuer, the issuer's auditor and/or the persons mentioned in

Art. 125 para. (1) to publish and/or present information and documents in the manner and within the period established by the normative acts of the National Commission.

(3) If the issuer does not comply with the requirement established in para. (2), the National Commission is entitled to make the respective information public after hearing the issuer.

(4) The responsibility for the disclosure of information by the issuer lies with the executive bodies of the issuer.

(5) The issuer is obliged to disclose the information in electronic form on its own web page.

The issuer's instrument of incorporation may also provide for the disclosure of information in one or more newspapers with national circulation.

[Art. 119 amended by Law No. 62 of 08.04.2016, in force 06.05.2016]

[Art. 119 amended by Law No. 180 of 25.07.2014, in force 15.08.2014]

Article 120. The annual report of the issuer

(1) Issuers are obliged to publish the annual report by 30 April and to take the necessary measures so that the report remains available to the public for a period of at least 5 years.

(2) The issuer's annual report shall contain:

1) the annual financial statements, with the audit report attached;

2) the management activity report;

3) the statements of the issuer's responsible persons, indicating their name and position, by which:

a) they confirm that, in their opinion, the annual financial statements are prepared in accordance with the legislation and provide a correct image of the assets and liabilities, of the financial situation and of the financial result of the issuer;

b) they confirm that, in their opinion, the activity report correctly presents the evolution and results of the issuer;

c) they provide a description of the main risks and uncertainties faced by the issuer.

(3) The issuer's annual report includes at least a correct and complete description of the development and performance of the economic-financial activity of the issuer and of the undertakings it controls, as well as a description of the main risks it faces.

(4) When publishing the annual report, the issuer publishes the audit report in full.

Article 121. The issuer's half-yearly report

(1) The issuer is obliged to publish the half-yearly report after the end of each half-year, but no later than 2 months after the end of the half-year.

(2) The issuer takes the necessary measures so that the half-yearly report remains available to the public for a period of at least 5 years.

(3) The issuer's half-yearly report shall contain:

1) the half-yearly financial statements;

2) the management interim activity report;

3) the statements of the issuer's responsible persons, indicating their name and position, by which:

a) they confirm that, in their opinion, the half-yearly financial statements are prepared in accordance with the legislation and provide a correct image of the assets and liabilities, of the financial situation and of the financial result of the issuer;

b) they confirm that, in their opinion, the activity report correctly presents the evolution and results of the issuer.

(4) The report includes at least the important events that took place during the half-year and their impact on the economic-financial situation of the issuer and of the undertakings it controls, and also contains a description of the main risks for the following half-year.

(5) In the case of equity issuers, in addition to the information established in paragraph (4), the interim activity report contains information on important transactions with the issuer's shares.

(6) If the half-yearly financial statements have been audited, the audit report is published in full.

[Art.121 amended by Law no.62 of 08.04.2016, in force 06.05.2016]

Article 122. The issuer's interim management statements

(1) Issuers are obliged to publish their interim management statements during the first half-year and during the second half-year.

(2) The interim statements are published within a time interval that begins 10 weeks after the beginning of the half-year and ends 6 weeks before the end of the half-year.

(3) The interim statements refer to the period between the beginning of the half-year and the date of publication of the statement and contain:

a) the general description of the important events and transactions carried out during the period in question and their impact on the activity of the issuer and of the undertakings it controls;

b) the general description of the financial situation and of the results of the issuer and of the undertakings it controls.

(4) Issuers that, at the request of the regulated market or on their own initiative, publish quarterly reports are not obliged to publish the interim management statements.

Article 123. Events influencing the issuer

(1) The issuer is obliged to publish information regarding:

a) any change in the voting rights attached to the different categories of shares issued by the issuer and to the derivative instruments that offer rights over shares;

b) new issues of securities;

c) the payment of dividends;

d) the conversion, splitting or consolidation of securities from previous issues;

e) events that influence or may influence the activity of the issuer or the price of the securities admitted to trading.

(2) The information specified in paragraph (1) is published as soon as possible, but no later than 7 days from the date of their occurrence.

Article 124. Incorporation documents The issuer is obliged to publish:

a) the issuer's incorporation act and articles of association, if the latter exist separately, within at most one month from the state registration of the issuer, but no later than the date of initiation of a public offer or of the procedure for admission to trading on the regulated market;

b) any amendments and additions to the issuer's incorporation act and articles of association, if the latter exist separately, within at most 15 days from the date of adoption of these amendments and additions;

c) the full updated text of the issuer's incorporation act and articles of association, if the latter exist separately, in the event of their amendment or addition, within at most 15 days from the date of adoption of the respective amendments and additions.

Article 125. Disclosure of information regarding major holdings of shares

(1) The holder of shares who has acquired or disposed of voting shares of an issuer considered a public interest entity or which is admitted to trading within an MTF is obliged to inform the issuer and the National Commission of this fact within at most 4 working days from the date of acquisition or disposal, if following this transaction they reach, exceed or fall below the threshold of 5%, 10%, 15%, 20%, 25%, 33%, 50%, 66%, 75% and 90%.

(2) The holder of voting shares is obliged to inform the issuer and the National Commission when the shareholding reaches the limits set out in paragraph (1) as a result of conversion, splitting or consolidation operations.

(3) The requirements set out in paragraphs (1) and (2) also apply when a person acquires securities that can be converted into voting shares or into financial instruments on the basis of which voting shares can be acquired. In addition, they apply to a natural or legal person to the extent that such person has the right to acquire, transfer or exercise voting rights in one of the following situations or in the case of a combination thereof:

a) the voting rights are held by a third party with whom the person concerned has concluded an agreement by which they undertake to adopt, through a concerted exercise of the voting rights they hold, a lasting common policy regarding the management of the company concerned;

b) the voting rights are held by a third party in accordance with an agreement concluded with the person concerned, which provides for the temporary and onerous transfer of the voting rights concerned;

c) the voting rights are attached to shares deposited as collateral with this person, provided that the person controls the voting rights and declares that they intend to exercise them;

d) the voting rights are attached to shares in respect of which this person holds the usufruct;

e) the voting rights are held or may be exercised in accordance with letters a)–d) by an undertaking controlled by this person;

f) the voting rights are attached to shares deposited with this person, who may exercise them as they wish, if they do not receive specific instructions from the shareholder;

g) the voting rights are held by a third party in their own name or on behalf of this person;

h) this person may exercise the voting rights as proxy and as they wish if they do not receive specific instructions from the shareholder.

(4) Within no more than 3 days from receiving the information in accordance with paragraphs (1)–(3), the issuer is obliged to publish this information.

(5) The requirements set out in paragraphs (1)–(3) do not apply to a market maker when reaching the limits set out in paragraph (1) if it does not intervene in the management of the issuer concerned and does not exert influence to determine the issuer to acquire these shares or to support their price.

(6) An issuer that has acquired or disposed of its own voting shares is obliged to publish information about this fact as soon as possible, but no later than 5 working days from the date of the transaction, if after the transaction the issuer reaches, exceeds or falls below the 5% or 10% threshold.

(7) The model standard forms for disclosure of information in accordance with this article and the model for completing them are established in the normative acts of the National Commission.

[Art.125 amended by Law no.62 of 08.04.2016, in force 06.05.2016]

[Art.125 amended by Law no.180 of 25.07.2014, in force 15.08.2014]

Article 126. Other requirements regarding disclosure of information

(1) Public institutions that disseminate statistics that may significantly influence the capital market or the price evolution of one or more financial instruments shall make this information public in a transparent and non-discriminatory manner.

(2) Financial analysts and persons who disseminate an investment study shall take the necessary measures to ensure non-discriminatory access to the investment study.

(3) The information in an investment study shall mention the personal interests and/or conflicts of interest of the financial analyst and of the persons who disseminate the study in relation to the financial instruments to which the study refers.

(4) Persons with management responsibilities within an issuer of securities and other financial instruments and, where applicable, persons closely associated with them shall communicate to the National Commission, in the manner established by its normative acts, transactions carried out with the shares of the respective issuer, with derivative financial instruments or with other instruments associated with them.

(5) Journalists, reporters and other persons who participate in the preparation and distribution of information regarding financial instruments through the mass media:

a) evaluate the information distributed publicly, taking into account the regulations and professional standards in the field of mass media;

b) carry out the distribution of the respective information, provided that the named persons do not obtain directly or indirectly benefits of any nature as a result of the dissemination of the information in question.

Section 2 Market abuse

Article 127. Inside information

(1) Inside information means any information of a precise nature, which has not been made public, which relates directly or indirectly to one or more issuers or to one or more financial instruments and which, if made public, could have a significant impact on the price of those financial instruments or on the price of derivatives related to those instruments.

(2) The use of inside information by an insider, for themselves or for a third party, directly or indirectly, is prohibited for the purpose of:

a) acquiring or disposing of the financial instruments to which the information in question relates; or

b) attempting to acquire or dispose of the financial instruments to which the information in question relates.

(3) The prohibition set out in paragraph (2) applies to an insider who holds inside information by virtue of:

a) their capacity as a member of the management or supervisory bodies of the issuer;

b) holding shares in the share capital of the issuer;

c) access to such information as a result of the exercise of professional functions and duties;

d) unlawful access to such information.

(4) The prohibition established in para. (2) applies to any other person who, although not falling under the provisions of para. (3), holds inside information and knows or ought to know that such information is inside information.

(5) Where the insider is a legal person, the prohibition established in para. (2) applies to the natural persons of the insider who participate or may participate in the decision-making regarding the acquisition or disposal of the financial instruments to which the inside information relates.

(6) The prohibition established in para. (2) does not apply to transactions with financial instruments carried out in order to fulfil an obligation arising before the moment when the insider obtained the inside information.

(7) The insider is not entitled:

a) to communicate or transmit in any other way inside information to another person, except where this takes place in the course of the normal exercise of the activity;

b) to recommend to another person to carry out transactions with financial instruments to which the inside information relates or to influence in any other way that person's decision to carry out transactions with such financial instruments.

(8) The issuer of financial instruments is obliged to make public, as soon as possible, the inside information relating to its activity and to its financial instruments, at least by posting such information on its web page.

(9) The issuer is entitled to delay, on its own responsibility, the publication of inside information in accordance with para. (8) in order not to affect its legitimate interests, provided that such delay will not mislead the public and that the issuer will ensure the confidentiality of the inside information.

(10) Where the issuer or its representative communicates inside information to a third party in the course of the normal exercise of the activity, the issuer is obliged to make public such information:

a) at the same moment when it is communicated to the third party – where the information was communicated to the third party non-accidentally; or

b) immediately after it was communicated to the third party – where the information was communicated to the third party accidentally.

(11) The obligation established in para. (10) does not apply where the third party to whom the inside information was communicated is obliged, under the legislation, the internal acts of the third party and/or the contract between the parties, to keep such information confidential.

(12) Issuers and persons acting on their behalf are obliged to establish a list of persons holding inside information, to update it periodically and to submit it to the National Commission in the manner established by it.

Article 128. Market manipulation

(1) Market manipulation is prohibited.

(2) The following shall be considered market manipulation:

1) transactions or trading orders:

a) which give or may give false or misleading information regarding the demand, supply or price of financial instruments; or

b) which, through the action of one or more persons acting in concert, influence the setting of the price of one or more financial instruments at an abnormal or artificial level, except where the person who entered into transactions or issued the trading orders demonstrates that the reasons for proceeding in this way are legitimate and that such transactions or trading orders are in accordance with the accepted practices on the regulated market or within the MTF;

2) carrying out fictitious or deceptive transactions;

3) placing fictitious trading orders;

4) disseminating and spreading, through the mass media (including via the Internet) or by any other means, of information that gives or may give false indications about financial instruments, where the person who disseminated the information knew or ought to have known that the information in question is false.

(3) Other requirements regarding the identification, prevention and avoidance of market abuses are established in the normative acts of the National Commission.

Article 129. Obligations of investment firms regarding market abuses Investment firms are obliged to inform the National Commission where they have information that a transaction with financial instruments is being carried out in breach of the provisions of this law regarding inside information and/or market manipulation.

Section 3 Investor compensation fund

Article 130. General provisions

(1) The investor compensation fund (hereinafter in this section – the Fund) is established and managed by the National Commission and is used in accordance with its decisions.

(11 ) The National Commission is the competent authority acting on behalf of the Fund.” paragraph (2) is supplemented at the end with the text: “The Fund is also used for compensating the clients of professional participants that held licences for the activity of fiduciary administration of investments in accordance with Law No. 199/1998 on the securities market (hereinafter – fiduciary administrators) and which, due to the lack of information in the clients' registers, did not transfer into real holding the assets of their clients within the term established in art. 147 para. (12).

(2) The Fund is established for the purpose of compensating, under the conditions of this law and of the normative acts of the National Commission, the natural person clients of investment firms in the event of the inability of the investment firms to return the clients' monetary funds and/or financial instruments transferred to the investment firms in the context of the provision of investment services and related services.

(3) The National Commission shall open a separate account for the accumulation of the financial resources of the Fund.

(4) The resources of the Fund may be used only for compensating investors' losses and for covering the operating expenses of the Fund, in accordance with the provisions of Art. 131 and 132.

(5) An investor's right to compensation may be the subject of an action by the investor against the Fund.

[Art. 130 supplemented by Law No. 33 of 16.03.2018, in force 06.04.2018]

Article 131. Compensation of investors

(1) In the event of the inability of investment firms to return clients' monetary funds and/or financial instruments, the Fund, in accordance with Art. 133, shall pay each affected client compensation of no more than 6000 lei.

(2) The compensation covers the financial instruments and monetary funds recorded in the client's account kept by the investment firm, existing at the time the insolvency proceedings are initiated in respect of that investment firm.

(3) The value of the financial instruments in the client's account shall be calculated in accordance with the last trading price of those financial instruments, existing at the time the insolvency proceedings are initiated in respect of that investment firm.

(4) The amount of the investment firm's obligations towards the client shall be calculated taking into account the total value of the client's monetary funds and financial instruments, from which the client's claims against the investment firm are deducted.

(5) The compensation shall be paid in national currency. If the firm holds monetary funds in foreign currency on behalf of the client, the compensation shall be paid in national currency, the equivalent being determined by applying the official exchange rate of the Moldovan leu on the date on which at least one of the situations set out in Art. 133 para. (1) occurs.

Article 1311. Compensation of clients of fiduciary administrators

(1) The records of monetary funds transferred to the Fund pursuant to Art. 1461 para. (13) shall be kept separately from other resources of the Fund. Those resources may be used only for compensating the clients of fiduciary administrators.

(2) By way of derogation from the provisions of Art. 131 para. (1), the compensation covers the financial instruments and monetary funds recorded in the client's account according to the information restored from the client registers of the fiduciary administrators.

(3) The Fund shall initiate the payment of compensations in accordance with para. (2) on the basis of the final court decision regarding the restoration of information from the client registers pertaining to the companies under fiduciary administration at the fiduciary administrators.

(4) Within no more than 3 working days from receipt of the lists restored in accordance with para. (3), the National Commission shall publish, at least on its official web page and in two newspapers with national circulation, information regarding the initiation of the compensation procedure for the clients of fiduciary administrators, the place, manner and period for the payment of compensations and other relevant information.

(5) The Fund shall ensure the payment of compensations within no more than one month from the date the payments begin. The payment of compensations may be made by postal order or by bank transfer.

[Art. 1311 introduced by Law No. 33 of 16.03.2018, in force 06.04.2018]

Article 132. Resources of the Fund

(1) The resources of the Fund shall be formed from:

a) the annual contributions of investment firms, in the amount established by the normative acts of the National Commission, paid annually, within no more than 5 months from the end of the calendar year;

b) income from investments;

c) income from late penalties;

d) income from the recovery of claims compensated by the Fund;

e) donations, subsidies, allocations and other income established by the normative acts of the National Commission.

(2) For the late transfer of resources to the Fund, investment firms shall pay a penalty of 0.1% of the amount owed for each day of delay.

(3) The Fund may receive loans only when the resources it holds are insufficient to cover compensations to the clients of investment firms.

(4) The resources allocated by investment firms as contributions to the Fund may not be returned to the investment firms, including in the event of their dissolution, reorganization or insolvency.

(5) The resources of the Fund may be invested in bank deposits, in state securities issued by the Ministry of Finance and in financial instruments issued by the National Bank of Moldova in the cases and under the conditions provided by the normative acts of the National Commission.

(6) The Fund shall not grant loans and shall not provide guarantees.

(7) The expenses related to the administration and operation of the Fund shall be covered from the resources specified in para. (1) letters b)–e).

[Art. 132 amended by Law No. 33 of 16.03.2018, in force 06.04.2018]

Article 133. Payment of compensations

(1) The Fund shall initiate the payment of compensations in accordance with Art. 131 in the situations where:

a) the National Commission considers that, for the time being, the investment firm is not able, for reasons related to its financial situation, to fulfil its obligations towards clients and there are also no grounds to consider that the firm will fulfil these obligations within a reasonable time;

b) the court has issued a final decision regarding the initiation of insolvency proceedings.

(2) In the case specified in para. (1) letter a), the National Commission shall adopt an order stating its reasons and by which it requests the investment firm, within no more than one day, to provide the list of the investment firm's clients and the value of the assets the firm held on behalf of each client. If the investment firm is a commercial bank, the order shall be adopted only with the opinion of the National Bank of Moldova.

(3) In the cases established in para. (1), within no more than one day from the issuance of the decision by the National Commission or from the date of the court decision, the investment firm shall present the list of clients of the investment firm and the value of the assets that the firm held on behalf of each client.

(4) If the court decision refers to the initiation of the insolvency proceedings of the investment firm, the list of clients and the value of their assets shall be presented by the liquidator within no more than one month from the date of initiation of the insolvency proceedings.

(5) Within no more than 3 days from receiving the list from the liquidator, the National Commission shall publish, at least on its own web page and in two newspapers with national circulation, information regarding the inability of the investment firm to honor its obligations to the client, the initiation of the client compensation procedure, the place, manner and period for payment of compensations and other relevant information.

The information shall be presented simultaneously to investment firms, the central depository and regulated markets.

(6) The Fund shall ensure the payment of compensations within no more than one month from the date of commencement of payments.

(7) The Fund shall assume the right of claim of clients in relation to the investment firm for the amount equal to the total value of compensations paid to the aggrieved clients of the investment firm.

(8) The obligations of the investment firm towards each client, for whom the compensation was paid, shall be reduced by the value of the compensation paid to that client for compensation of the damage.

(9) Claims towards clients, other than those paid by the Fund, shall be offset from the account of the patrimony of the investment firm in insolvency proceedings after the execution of the Fund's claim.

(10) The Fund shall be entitled to pay compensations by postal order or by bank transfer.

(11) Within no more than 3 days from the date of complete payment of the compensation, the National Commission shall inform the liquidator about the value of compensations paid to each client.

Article 134. Exemption from compensations

(1) From the Fund's account, damages shall not be compensated and compensations shall not be paid to:

a) persons who hold a share of at least 5% in the capital of the investment firm;

b) members of the council, of the single executive body or members of the collegial executive body and of the control bodies of the investment firm;

c) persons who are in family relations with the persons indicated in letter b);

d) professional clients;

e) the auditor of the investment firm and its employees;

f) clients of the investment firm who are directly responsible for acts that caused or aggravated the negative financial situation of the investment firm.

(2) From the Fund's account, compensations may be paid only to clients of investment firms, for whom services are provided under contracts concluded after the entry into force of this law and which do not refer to financial instruments and/or monetary means transmitted by clients to investment firms before the creation of the Fund, except for the payment of compensations to clients of fiduciary administrators.

(3) From the Fund's account, compensations cannot be made for claims towards clients resulting from a money laundering and terrorist financing transaction, according to the court decision.

[Art.134 supplemented by Law no.33 of 16.03.2018, in force 06.04.2018]

Article 135. Obligations of investment firms regarding informing clients

(1) Investment firms are obliged to inform clients about the Fund and the purpose of its activity before providing the service.

(2) At the client's request, the investment firm shall provide additional information regarding the Fund's activity, the method of calculating and paying compensations and other information related to the Fund.

Article 136. Enforcement measures

(1) If an investment firm does not pay contributions to the Fund within the established term, the National Commission shall send to the investment firm a written notice regarding the payment of outstanding contributions to the Fund within no more than one month from the date of sending the notice.

(2) If the investment firm does not pay contributions to the Fund within one month from the date of sending the notice, the National Commission shall be entitled to apply sanctions in accordance with the provisions of this law.

(3) In case of consecutive application of 3 sanctions for non-payment of contributions to the Fund, the National Commission shall be entitled to suspend the investment firm's license. If within the terms indicated in the decision of the National Commission the licensed person does not comply with the established requirements, the National Commission shall be entitled to withdraw the investment firm's license.

Section 4 Professional clients and qualified investors

Article 137. Professional clients

(1) The status of professional client is held by the persons and institutions specified in para. (2)

and by persons who obtain this status, upon request, in accordance with para. (3).

(2) Professional clients are:

1) investment firms, commercial banks, insurance companies, UCITS and their investment fiduciary management companies, pension funds;

2) central and local public administration authorities, the National Bank of Moldova and central banks of other states, international and regional bodies, such as the World Bank, the International Monetary Fund, the European Central Bank, the European Investment Bank, the European Bank for Reconstruction and Development and other similar international institutions;

3) legal entities that meet at least 2 of the following criteria:

a) total assets constitute the equivalent in lei of at least 20 million euros calculated at the official exchange rate of the National Bank of Moldova;

b) the gross profit constitutes the equivalent in lei of at least 40 million euro calculated at the official exchange rate of the National Bank of Moldova;

c) the equity capital constitutes the equivalent in lei of at least 2 million euro calculated at the official exchange rate of the National Bank of Moldova;

4) other institutional investors whose main activity consists in investments in financial instruments, in particular entities engaged in raising capital by securitizing assets or through other financing operations.

(3) Natural or legal persons who meet at least 2 of the following criteria may obtain, upon request, the status of professional client:

a) they have carried out on the respective market on average 10 transactions of significant value per quarter in the last 4 preceding quarters;

b) they hold an investment portfolio consisting of financial instruments and/or bank deposits that has a value exceeding the equivalent in lei of 500000 euro calculated at the official exchange rate of the National Bank of Moldova;

c) they have been active or are active in the financial sector for at least one year, holding a position that requires knowledge in the field of transactions with financial instruments or of investment services and activities.

(4) The status of professional client is obtained in the following manner:

a) the applicant addresses to this end a written request to the investment firm, indicating whether it wishes to obtain this status generally in relation to the investment firm or only in the case of certain services and/or transactions; if necessary, the applicant attaches to the request the relevant documents confirming that it meets at least two criteria set out in para.(3);

b) the investment firm takes the necessary measures to verify that the applicant meets at least two criteria set out in para.(3);

c) the investment firm provides written information on the rights and forms of protection that the applicant risks losing upon obtaining the status of professional client;

d) the client submits to the investment firm a written declaration, separate from the contracts concluded between the applicant and the investment firm, that it is aware of the consequences of obtaining the status of professional client; upon submitting the declaration, the applicant obtains the status of professional client.

(5) Investment firms refuse the classification of the applicant as a professional client if the applicant does not meet the requirements set out in para.(3) and/or does not provide confirmations to that effect.

(6) Professional clients have the right to request the investment firm, generally or separately for certain cases or transactions, not to be considered professional clients in relation to the investment firm in question. Upon making this request, the investment firm considers the professional client a retail client and applies to it the provisions of this law regarding retail clients.

(7) The professional client is obliged to address to the investment firm the request set out in para.(6)

if it considers that it is unable to correctly assess the risks to which it is or may be exposed as a professional client.

(8) The professional client's request to be considered a retail client is included in a written agreement, concluded separately or as part of the contract concluded with the investment firm.

The agreement expressly provides for the services or situations in which the professional client is considered a retail client.

(9) Professional clients are obliged to inform investment firms about any changes and considerations that have or may have the effect of losing the status of professional client.

Article 138. Qualified investors

(1) The status of qualified investor is held by the persons and institutions specified in art.137 para.(2)

items 1) and 2) and para.(3) and the persons who obtain this status upon request, in accordance with para.(2) of this article.

(2) The status of qualified investor may be obtained by:

1) legal persons that meet at least two of the following criteria:

a) they have an average number of employees of at least 250 persons;

b) the value of total assets constitutes the equivalent in lei of at least 43 million euro, calculated at the official exchange rate of the National Bank of Moldova;

c) the gross profit constitutes the equivalent in lei of at least 50 million euro, calculated at the official exchange rate of the National Bank of Moldova;

2) natural persons who meet at least 2 criteria set out in art.137 para.(3).

(3) In order to obtain, upon request, the status of qualified investor, the applicant submits on its own responsibility a declaration to that effect to the person carrying out the public offering and/or the investment firm through whose intermediation the public offering is carried out. Upon submitting the declaration, the applicant obtains the status of qualified investor.

(4) The applicant is considered a qualified investor only in relation to the person carrying out the public offering and/or the investment firm through whose intermediation the public offering is carried out and to which the applicant has submitted the declaration specified in para.(3).

(5) Upon receiving a declaration in accordance with para.(3), the person carrying out the public offering and/or the investment firm through whose intermediation the public offering is carried out:

a) are not obliged to verify that the applicant complies with the provisions of para.(2);

b) are not entitled to refuse the applicant the obtaining of the status of qualified investor.

Chapter VII REGULATION, SUPERVISION AND CONTROL

Article 139. General provisions

(1) The National Commission is entitled to exercise its regulatory, supervisory and control functions in relation to any participant in the capital market, including persons licensed or authorized under the provisions of this law, issuers whose securities have been the subject of a public offering and holders of financial instruments, where the National Commission considers that:

a) the exercise of the functions is necessary for investor protection;

b) the participant is not fit to carry out investment activities of a certain type;

c) the provisions of this law or of the normative acts of the National Commission are violated.

(2) In order to protect holders of financial instruments, the National Commission approves, by decision, the amount of the fees:

a) for custody operations charged by the central depository;

b) for the transfer and encumbrance of rights over financial instruments charged by the central depository.

(3) Any decision of the National Commission may be challenged in court in accordance with the Administrative Litigation Law No. 793-XIV of 10 February 2000.

Article 140. Regulation through licensing and authorization

(1) The National Commission issues licenses and authorizations for activity on the capital market to persons who meet the requirements established by this law and by the normative acts of the National Commission.

(2) The National Commission issues the following licenses and authorizations for activity on the capital market:

a) investment firm license;

b) market operator license;

c) central depository license;

d) registry company authorization;

e) other authorizations provided for by this law.

(3) The license shall be issued by the National Commission within no more than 6 months from the date the applicant submits the license application, provided that the applicant meets the requirements established in paragraph (1).

(4) The National Commission rejects the license application if:

a) the applicant does not meet the licensing requirements for the respective activity;

b) the applicant is in insolvency or reorganization proceedings;

c) the applicant's license was previously withdrawn as a result of a violation of capital market legislation;

d) in the case provided for in Art. 39 paragraph (5);

e) in the case provided for in Art. 40 paragraph (18) – for applicants that are not commercial banks.

(5) The license application may be withdrawn by the applicant before the license is issued or the application is rejected.

(6) If the license application is rejected, the National Commission shall inform the applicant in writing and communicate the reasons for not issuing the license.

(7) The rejection of the license application may be challenged by the applicant in court within no more than 30 days from the date of rejection of the application.

(8) The licence is issued for an unlimited period and is non-transferable.

(9) The fee for the issuance of the licences established in para.(2) letters a) and b) is 10000 lei.

(10) The fee for the issuance of the licence and the authorisation established in para.(2) letters c) and d) is 5000 lei.

(11) The fee for the issuance of the licences shall be paid into the budget of the National Commission by the licensed person within a term of no more than 10 days from the date of the decision of the National Commission to issue the licence.

(12) Upon issuance of the licence, the National Commission shall include the information regarding the licensed person in the Register of Licences for Activity on the Non-Bank Financial Market, kept by the National Commission.

(13) The National Commission is entitled to suspend the licence, for a term of no more than 90 days, in the event that the licensed person:

a) has not started to provide the services or to carry out the activities for which it holds a licence within 1 year of receiving it, or has not carried out any of the activities indicated in the licence within 6 months;

b) has not paid the fee for the issuance of the licence;

c) seriously and systematically violates the provisions of this law and of the decisions of the National Commission relating to investment services and activities;

d) has obtained the licence by providing false information or by other illegal means;

e) does not meet the licensing requirements established by this law for the respective activity;

f) falls under the scope of art.39 para.(5);

g) falls under the scope of art.40 para.(18);

h) has not become a member of the Investor Compensation Fund within the period established by this law for investment companies.

(14) If, upon expiry of the period for which the licence was suspended, all violations have not been remedied, the National Commission is entitled to withdraw the licence. Withdrawal of the licence at the request of the licensed person takes place after the submission by the latter of a confirmation regarding the absence of claims from clients, to which supporting documents are also attached.

(15) Licensed or authorized persons are obliged:

a) to comply with the licensing and/or authorization conditions;

b) to inform the National Commission of any significant change in the initial licensing and/or authorization conditions;

c) to submit reports to the National Commission, in accordance with the regulations established by the normative acts of the National Commission;

d) to disclose information publicly, in accordance with the regulations established by the normative acts of the National Commission;

e) to immediately inform the National Commission of any significant violation of the legislation relating to operations and/or activities of manipulation, market abuse or other nature that may affect market stability.

(16) The National Commission issues regulations on prudential and capital adequacy requirements for the proper assessment of risks, for the purpose of preventing and/or limiting them.

[Art.140 amended by Law no.33 of 16.03.2018, in force 06.04.2018]

Article 141. Supervision and control of the capital market

(1) The National Commission is entitled to carry out supervision and control regarding:

a) the activity of licensed or authorized persons, their activities and services, the electronic systems used and the transactions with financial instruments carried out by them;

b) offerors, public offers and takeover offers, including cases where a person is obliged, in accordance with the provisions of this law, to make such offers;

c) capital market abuse;

d) disclosure of information.

(2) In carrying out its supervision and control duties with respect to market operators, regulated markets, system operators and with respect to MTFs, the National Commission is entitled to appoint collaborators of the National Commission as inspectors of the regulated market and, respectively, as inspectors of the MTF.

(3) In carrying out its supervision and control duties with respect to market operators, regulated markets, MTFs and/or the central depository, the National Commission is entitled to apply real-time electronic supervision and control systems connected to their electronic systems.

(4) Where electronic supervision and control systems are applied, market operators, regulated markets, MTFs and the central depository are obliged to ensure the connection and access of the National Commission's electronic supervision and control systems.

(5) The decision on carrying out the control and/or investigations is taken by the National Commission or by the member of the board of administration of the National Commission to whom these powers have been delegated.

(6) In order to protect the interests of clients and investors and/or prevent violations of capital market legislation, without prejudice to its right to withdraw or suspend the license, to apply sanctions, the National Commission is entitled to prohibit a licensed person or an offeror:

a) from concluding transactions with financial instruments;

b) from carrying out, for a determined period of time, one or more activities included in the license.

(7) In carrying out its supervision and control duties, the National Commission is entitled:

a) to prohibit licensed persons and offerors from disposing of or carrying out transactions with respect to a certain asset, including with respect to an asset located outside the Republic of Moldova;

b) to oblige licensed persons and offerors to transfer their own assets or assets held on behalf of clients for safekeeping and/or administration to another person;

c) to summon and hear any person in order to obtain information;

d) to request existing telephone records and data traffic;

e) to request the seizure or freezing of assets;

f) to suspend or prohibit the trading of a financial instrument;

g) to request the provision of information and documents from auditors, issuers, holders of shares or other financial instruments, as well as from persons who verify them or who are verified by them;

h) to carry out on-site inspections in the territory, in order to verify compliance with the provisions of this law and of the normative acts of the National Commission;

i) to transmit relevant information to law enforcement bodies for the purpose of initiating criminal prosecution.

(8) Any measure, prohibition or imposition in relation to licensed, authorized persons and/or offerors, carried out by the National Commission under this article, shall be decided by ordinance of the National Commission.

Article 1411. Prudential supervision of investment firms

(1) The National Commission ensures the verification of the governance framework, strategies, processes and mechanisms implemented by each investment firm, for compliance with the provisions of this law and of the normative acts of the National Commission, and also carries out its own assessment of the risks to which the investment firm is or may be exposed.

(2) The verifications and assessments referred to in para. (1) aim to monitor the fulfillment by investment firms of the requirements provided by this law and by the normative acts of the National Commission.

(3) Based on the verifications and assessments referred to in para. (1), the National Commission determines to what extent the governance framework, strategies, processes and mechanisms implemented by an investment firm, its own funds held and its liquidity ensure prudent management and adequate coverage of risks in relation to the risk profile of the investment firm.

(4) The National Commission establishes the frequency and level of detail of the verifications and assessments referred to in para. (1), taking into account the principle of proportionality, namely considering the size, systemic importance, nature, scale and complexity of the activities carried out by each investment firm. The updating of verifications and assessments shall be carried out at least once a year for investment firms for which a prudential supervision program has been established in accordance with the provisions of para. (6)–(11).

(5) If, according to the provisions of para. (1)–(4), the National Commission determines that investment firms with a similar risk profile, such as similar business models or similar geographical locations of exposures, are or could be exposed to similar risks or could expose the financial system to similar risks, it may carry out the verification and assessment process referred to in para. (1)–(4) in the same or a similar manner.

(6) The monitoring of compliance by investment firms with prudential requirements and other requirements, provided by this law and by the normative acts of the National Commission, shall be carried out by the National Commission based on the reports submitted by investment firms and through on-site controls carried out at the premises of investment firms.

(7) The National Commission, whenever it considers necessary, adopts a prudential supervision programme for the investment firms it supervises. That programme takes into account the review and evaluation process provided for in paragraphs (1)–(4) and includes the following:

a) an indication of how the National Commission intends to fulfil its duties and allocate resources;

b) an identification of the investment firms to be subject to enhanced supervision and the measures adopted regarding such supervision, in accordance with paragraphs (1)–(4);

c) a plan for on-site inspections of the premises used by an investment firm, including by its branches established in another state, on the basis of the cooperation agreements concluded by the National Commission with the competent authority of that state.

(8) The prudential supervision programme targets the following investment firms:

a) investment firms for which the results of the supervision and evaluation process indicate significant risks to their financial soundness or indicate a breach of the provisions of this law or of the normative acts of the National Commission;

b) investment firms that present a systemic risk to the financial system;

c) any other investment firm for which the National Commission considers this necessary.

(9) When considered necessary, in accordance with paragraphs (1)–(4), the National Commission undertakes, in particular, the following measures:

a) increasing the number or frequency of on-site inspections of the investment firm;

b) the permanent presence of representatives of the National Commission within the investment firm;

c) additional or more frequent reporting by the investment firm;

d) additional or more frequent analyses of the operational, strategic or business plans of the investment firm;

e) thematic controls to monitor specific risks with a higher probability of materialising.

(10) The verifications and evaluations within on-site and/or ex officio controls shall be carried out by the staff of the National Commission, empowered for this purpose, and/or by audit firms, and/or by experts appointed by the National Commission.

(11) Investment firms are obliged to allow the staff of the National Commission and other persons empowered by it to carry out the verification and evaluation, to examine the records, accounts and operations, as well as to provide all documents and information related to the conduct of the investment firm's activity as requested by them.

(12) As a result of the process of verification and evaluation of the investment firm, when it considers necessary, the National Commission is entitled:

a) to require the investment firm to maintain own funds, in addition to the requirements provided for in Art. 38;

b) to require the investment firm to submit a plan for restoring compliance with the requirements provided for by this law and by the normative acts of the National Commission and to set a deadline for the implementation of that plan, including improvements thereto regarding scope and deadline;

c) to restrict, limit and/or suspend the operations, the network of branches and/or the services and activities carried out under the licence held or to request the transfer of activities that present excessive risks to the soundness of the investment firm;

d) to restrict or prohibit distributions or payments in the form of dividends by the investment firm to shareholders, provided that the prohibition does not constitute a situation of non-compliance with payment obligations for the respective investment firm;

e) to require the investment firm to review its remuneration policies;

f) to impose on the investment firm additional reporting requirements or a higher frequency of reporting, including reporting on the capital situation and liquidity positions;

g) to require the investment firm to publish additional information.

(13) Investment firms must provide the National Commission with any information necessary for assessing their compliance with the prudential requirements provided for by this law and by the acts

normative acts issued for this purpose by the National Commission. The internal control mechanisms and the accounting and administrative procedures of the investment firm must allow verification, at any time, of compliance with the prudential requirements.

[Art. 1411 introduced by Law No. 33 of 16.03.2018, in force 06.04.2018]

Article 142. Investigations

(1) In order to carry out its supervision and control duties, the National Commission is entitled to request access to information, to the premises and to the electronic systems of the person under investigation.

(2) Investigations regarding persons under investigation shall be carried out by the staff of the National Commission and/or by any other persons designated by the National Commission.

(3) When investigations are carried out by the National Commission, the persons under investigation are obliged:

a) to provide the National Commission, at its request, with documents, information, including copies thereof, and the necessary support in the process of carrying out the supervision and control duties within a short deadline;

b) to ensure access for the staff of the National Commission carrying out the investigation to their premises, to the electronic systems used and to the technical equipment used.

(4) The request for information shall be made by means of written notifications, addressed to the person under investigation, issued by the staff of the National Commission carrying out the investigation.

(5) The National Commission is entitled to request existing documents or acts, as well as documents or acts that must be drawn up.

(6) The statements of the person under investigation or of their employees may be used as evidence against them, provided that they can be confirmed.

(7) When conducting investigations, if this is necessary to protect the interests of investors and clients of investment firms, the National Commission is entitled to request the court to seize the assets of the persons under investigation.

Article 143. External audit

(1) Legal entities holding investment firm licenses, market operator licenses and central depository licenses, and those holding registry company authorizations are subject to the mandatory audit of annual financial statements, as well as to the audit of services and activities carried out at least once a year, in accordance with the legislation in the field of audit and with the normative acts drafted by the National Commission and the Ministry of Finance.

(2) Within up to 120 days from the end of the management period, the persons specified in para. (1) are obliged to submit to the National Commission the audit report on the annual financial statements.

(3) If the audit report does not disclose the information established by this law and by the normative acts of the National Commission, the National Commission is entitled to request the persons named in para. (1) to appoint another auditor to perform a repeated audit of the annual financial statements.

(4) The auditor is obliged to inform the National Commission immediately if, in the exercise of their duties, they identify situations that could:

a) constitute a serious violation of the legislative acts or of the normative acts of the National Commission regarding the persons specified in para. (1);

b) affect the continuous operation of the persons specified in para. (1);

c) lead to the refusal to certify the accounts or to the expression of restrictions on the accounts;

d) lead to any of the situations specified in items a)–c) in relation to legal entities that have close links with the persons specified in para. (1).

(5) The auditor is obliged to provide the National Commission, at its request, with any information and documents related to the activity of the persons specified in para. (1).

(6) Informing the National Commission in good faith by the auditor, in accordance with para. (4), does not constitute a violation of contractual or legal restrictions on the disclosure of information by the auditor and does not entail liability or sanctioning of the auditor.

[Art.143 amended by Law no.54 of 30.03.2017, in force 14.04.2017]

Article 144. Violations and sanctions

(1) Violations of the imperative provisions of this law and the acts expressly established by the Contravention Code of the Republic of Moldova and the Criminal Code of the Republic of Moldova are considered violations on the capital market.

(2) For non-compliance with the imperative provisions of this law and of the normative acts in the field, the National Commission applies as a form of sanction:

a) the warning;

b) the public warning;

c) suspension or withdrawal of qualification certificates issued by the National Commission;

d) suspension or withdrawal of the status of person with management responsibilities;

e) suspension or prohibition of the activity on the capital market of the natural person;

f) suspension of the license;

g) withdrawal of the license or authorization;

h) fine of up to one million lei.

(3) The application of sanctions in accordance with para. (2) does not exclude the possibility of applying contravention sanctions and penalties in accordance with the Contravention Code of the Republic of Moldova and, respectively, the Criminal Code of the Republic of Moldova.

(4) The warning and the public warning are applied in the case of violations that do not result in causing significant harm to the clients of licensed or authorized persons.

(5) The warning is applied and brought to the attention of the sanctioned person individually, without being made public.

(6) The public warning is applied and brought to the attention of the sanctioned person, being simultaneously disclosed publicly.

(7) Suspension and withdrawal of the license, as well as withdrawal of the authorization, are applied in the cases established by this law.

(8) The amount of the fine provided in para. (2) item h), as well as the application of the sanctions in items c)–e)

are established in the normative acts of the National Commission, depending on the violation that occurred.

(9) Under the conditions of this law, a serious and systematic violation of the provisions of this law and of the decisions of the National Commission regarding investment firms and investment services and activities is considered to be the cases where at least one of the following situations is present:

a) there are 7 previous decisions of the National Commission regarding the violation by the person concerned of the legislation during the last 2 years, for which sanctions in the form of a warning and/or contravention sanctions were applied;

b) the person concerned has admitted and/or caused harm to clients and/or investors in a total amount of at least one million lei.

(10) The harm caused as a result of the violation of the legislation regulating activity on the capital market is to be repaired in the manner established by civil legislation.

Article 145. Exemption from publication of decisions

(1) By derogation from Law no.192-XIV of 12 November 1998 on the National Commission of the Financial Market, the National Commission is entitled not to publish in the Official Gazette of the Republic of Moldova its decisions on establishing a measure provided for in Art. 141 and 142 of this law and/or on the results of the investigation, or on the application of sanctions, if it considers that the disclosure of this information may harm the performance of supervision and control duties, may cause harm to the clients of licensed or authorized persons and/or investors and/or may affect the normal operation of the capital market.

(2) If it does not publish its decisions, the National Commission, in accordance with para. (1):

a) in case of necessity, informs the data subject individually about that decision;

b) does not publicly disclose that decision;

c) shall inform the National Bank of Moldova about that decision – in the case of applying a measure against a commercial bank.

Article 146. Cessation of activity on the capital market of licensed or authorized persons

(1) Upon withdrawal of previously issued licenses or authorizations, the National Commission supervises the manner of execution of the obligations of licensed or authorized persons towards their clients.

(2) For the purpose of executing para. (1), the National Commission is entitled:

a) to request the court to initiate insolvency proceedings in respect of the licensed or authorized person and to order the necessary interim measures; and/or

b) to request the court to dissolve the licensed or authorized person and to appoint the liquidator; and/or

c) to suspend banking operations on the current accounts of the licensed or authorized person;

and/or

d) to encumber, with a prohibition on alienation, the financial instruments of the licensed person held in its own name and/or in the name of clients.

Article 1461. Termination of capital market activity of fiduciary administrators

(1) By way of derogation from the provisions of art.147 paragraph (12), client assets (securities, partnership interests) held in fiduciary administration with fiduciary administrators, which, within the established term, have not been transferred into actual holding due to the lack of information in the client registers, are put up for sale in the manner established by this article and by the normative acts of the National Commission.

(2) Securities of joint-stock companies held in fiduciary administration with fiduciary administrators are put up for sale within open-outcry auctions organized on a regulated market and/or within an MTF. Securities and partnership interests for which the pre-emption right established at art.27 paragraph (8) of Law no.1134/1997 on joint-stock companies and at art.25 paragraph (3) of Law no.135/2007 on limited liability companies must be observed are alienated in accordance with the legislation in force.

(3) Fiduciary administrators are entitled to request the redemption of securities in accordance with

art.79 of Law no.1134/1997 on joint-stock companies, as well as to sell securities within takeover offers and as a result of withdrawal or mandatory acquisition requests, in accordance with this Law.

(4) The initial price at which the securities specified in paragraph (2) are put up for sale must be at least equal to the greater of the nominal value and the net asset value attributable to one share, according to the last annual financial statements presented to the Financial Statements Service under the National Bureau of Statistics and confirmed by the auditor's report or, as applicable, by the audit committee's report. The initial price at which the partnership interests are put up for sale is established starting from the net asset value of the commercial company, according to the last financial statements presented to the Financial Statements Service under the National Bureau of Statistics and confirmed by

the auditor's report, as applicable. The selling price (initial price) of the securities/partnership interests is approved in advance by the National Commission in accordance with its normative acts. In the event that, after several revaluations and sale attempts, the selling price of the securities and partnership interests has reached the limit of 10 percent of the initial price value, the securities/partnership interests are sold without announcement of the initial price (at the highest price proposed by the buyer), in accordance with the normative acts of the National Commission.

(5) Monetary funds accumulated from the sale of assets under this article are invested in state securities and/or in deposit accounts at commercial banks that meet the criteria established by the National Commission and that offer the best conditions.

(6) Upon the sale, in the manner established by this article, of the shareholdings held by fiduciary administrators in joint-stock companies undergoing dissolution, the provisions of

art.97 paragraph (4) of Law no.1134/1997 on joint-stock companies do not apply.

(7) The single central depository of securities, as well as the authorized and licensed persons on the capital market that keep records of ownership rights over securities or that have archived the information from the securities holders' registers, issue, within the terms established by legislation, the documents necessary for carrying out transactions, with the subsequent registration of the corresponding changes in the securities holders' registers.

(8) By way of derogation from the provisions of art.17 of Law no.220/2007 on the state registration of legal entities and individual entrepreneurs and of art.17 of Law no.135/2007 on limited liability companies, on the basis of the decision of the liquidation commission of the professional activity type on the securities market, the state registration body, within 5 working days, registers the change of partners of the limited liability company, making the respective entries in the State Register of Legal Entities.

(9) Securities and partnership interests that will not be alienated in accordance with paragraphs (2)–(4)

will be reflected in the liquidation report at zero value and will be transferred to the commercial company as treasury shares/withdrawn capital (the acquired partnership interest) within 3 months after approval by the National Commission of the liquidation report and of the asset distribution plan in accordance with the provisions of this article.

(10) During the period of alienation of assets, fiduciary administrators ensure the complete restoration of the information in their clients' registers on the basis of the information received from the law enforcement bodies and undertake the necessary measures for its restoration and confirmation in court.

(11) Fiduciary administrators are prohibited from collecting income in the form of remuneration from their clients' assets, with the exception of covering the actual expenses related to the measures undertaken for the purpose of implementing the provisions of this article.

(12) In the event that, during the period of alienation of assets under the provisions of this article, the information in the clients' registers is restored, fiduciary administrators initiate the distribution of monetary funds to their clients, proportionally (in proportion) to the size of the securities/partnership interest held by each client, within a term of no more than 3 months after approval by the National Commission of the liquidation report and of the asset distribution plan.

(13) Monetary funds that are not distributed to the clients of fiduciary administrators due to the impossibility of restoring the registers within 3 years after the approval by the National Commission of the liquidation report and of the draft distribution of assets in accordance with the provisions of this article are transferred to the Fund for the purpose of keeping and management, and may be used only for compensating the clients of fiduciary administrators in the manner established at art.1311, as the information from the clients' registers is restored.

[Art.1461 introduced by Law no.33 of 16.03.2018, in force 06.04.2018]

Chapter VIII FINAL AND TRANSITIONAL PROVISIONS

Article 147. Entry into force

(1) This law enters into force 12 months after the date of publication.

(2) Licenses for carrying out professional activity on the securities market, issued previously on the basis of Law no.199-XIV of 18 November 1998 on the securities market, with the exception of licenses for the activity of valuation of securities and the assets relating thereto, retain their validity until the new licenses are obtained, under the conditions established in para.(3) lit.a) of this article.

(3) Within 18 months from the date of entry into force of this law:

a) persons holding a license for carrying out professional activity on the securities market on the basis of Law no.199-XIV of 18 November 1998 on the securities market, with the exception of persons holding a license for the activity of valuation of securities and the assets relating thereto, are obliged to comply with the provisions of this law in order to obtain the new licenses and authorizations;

b) The National Commission shall draw up and approve its normative acts in accordance with the provisions of this law.

(4) The Government, within 6 months from the entry into force of this law, shall submit to the Parliament proposals for bringing the legislation in force into conformity with this law.

(5) Securities issuers that, at the moment of entry into force of this law, are in the process of issuing securities are entitled to complete the respective issuance under the conditions established by the decision on the issuance of securities.

(6) The professional participant in the securities market holding the license for the activity of maintaining the register of securities holders is entitled to operate on the basis of the previously issued license until the expiry of its term of validity.

(61) Independent registrars, registry companies and issuers that maintain the register of securities holders on their own are obliged to transmit within 45 calendar days from the date of publication of these amendments the electronic back-up copy of each register maintained by them, together with the data contained in the register of securities holders, starting from the date the register was formed. The National Commission shall establish the rules regarding the manner and deadlines for submitting the requested data. After their submission, independent registrars, registry companies, and issuers that keep the register of securities holders independently shall update the information submitted to the National Commission in accordance with the rules established by it.

(62 ) The National Commission shall create an integrated system for maintaining the information submitted in accordance with para.(61 ) and shall reconcile the initial data back-up submitted with subsequent updates.

(63 ) The purpose of collecting the back-up data submitted in accordance with para.(61 ) above and the permitted uses of these data serve only for: a) storing data for their restoration in case the information held by the registrar, registry company, or issuer is compromised, damaged, lost, or stolen; and b) monitoring and supervising independent registrars, registry companies, and issuers that keep the register of securities holders independently, for the purpose of implementing and enforcing the provisions of this law and other relevant legislative norms regarding securities.

(64 ) The National Commission shall implement measures and procedures that will guarantee the confidentiality and integrity of the information submitted in accordance with para.(61 ) and shall monitor the access of the National Commission's personnel to this information.

(65 ) Independent registrars, registry companies and issuers that keep their own register of securities holders are obliged to transmit all registers of public interest entities, kept by them, to the Central Depository no earlier than 45 calendar days from the date of publication and no later than 30 calendar days from the date of entry into force of these amendments, in accordance with the schedule and procedure established by the National Commission and coordinated with the Central Depository concerned.

(66 ) The transmission of the register(s) in accordance with para.(65 ) shall be carried out under the supervision of the relevant issuer in accordance with a procedure coordinated with the Central Depository and the relevant independent registrar or registry company.

(67 ) The Central Depository that will take over the data in accordance with para.(65 ) above shall notify the National Commission about the registers taken over and about the discrepancies found.

(68 ) Persons obliged to transfer information in accordance with para.(61 ) and para.(65 ) and issuers obliged to supervise its transfer in accordance with para.(66 ):

a) shall attest to the accuracy and completeness of the information, for each transfer made;

b) bear administrative, civil and/or criminal liability for the loss of integrity and/or accuracy of the data transmitted to the National Commission and/or to the Central Depository, and the Central Depository bears the same liability for non-compliance with para.(67 ).

(69 ) The date of entry into force of these modifications and completions, for the purpose of calculating the deadlines established in para.(65 ), shall be 10 months from the day of their publication.

(7) Until the expiry of the term established in para.(3) of this article, the trading of securities in circulation at the date of publication of this law shall be carried out in the manner and under the conditions established by the National Commission.

(8) Securities which, at the date of expiry of the term established in para.(3) of this article, are registered on the stock exchange are considered:

a) admitted for trading on the regulated market if they meet the requirements established in art.67 of this law;

b) admitted for trading within the MTF if they meet the requirements established by the MTF;

c) admitted for trading outside the regulated market and/or the MTF, in accordance with the normative acts of the National Commission.

(9) In the event of the emergence of new regulated markets and/or new MTFs, the securities of the issuers indicated in para.(8) lit.a) and b) of this article may be admitted for trading on these regulated markets and/or within the MTF at the decision of the issuer and in accordance with the conditions established by the normative acts of the National Commission, without the publication of a prospectus for the public offering, subject to the admission conditions established by the respective regulated markets and MTFs.

(10) If professional participants, with the exception of persons holding licenses for the activity of valuation of securities and assets related to them, do not comply with the requirements provided in para.(3) lit.a) of this article:

a) the licenses held for carrying out professional activity on the securities market under Law no.199-XIV of 18 November 1998 on the securities market become null;

b) shall undertake the necessary measures and submit to the National Commission the documents related to the exclusion from the Register of issued licenses.

(11) Holders of licenses for the activity of valuation of securities and assets related to them are entitled to carry out these activities until the expiry of the validity term of the licenses held. The National Commission shall supervise their activity until the expiry of the validity term of the licenses held.

(12) Professional participants who hold licenses for the activity of fiduciary administration of investments and who do not comply with the requirements provided in para.(3) of this article shall transfer into real holding the assets of their clients within at most 3 months from the expiry of the term provided in para.(3) of this article.

(13) Applications for registration of the issue of securities, for carrying out public offerings and other similar applications under examination at the National Commission after the expiry of the term established in para.(3) of this article shall be withdrawn or completed by the persons who submitted them in order to be brought, together with the attached documents, into conformity with this law.

(14) The National Commission shall ensure control over compliance with the provisions of this article by issuers, professional participants and other participants in the capital market.

(15) The normative acts of the National Commission shall apply to the extent that they do not contradict the provisions of this law.

(16) On the date of entry into force of this law, Law no.1204-XIII of 5 June 1997 on investment funds (republished in the Official Monitor of the Republic of Moldova, 2003, no.177–188, art.749), with subsequent modifications and completions, is repealed, and on the date of expiry of the term established in para.(3) of this article, Law no.199-XIV of 18 November 1998 on the securities market (republished in the Official Monitor of the Republic of Moldova, 2008, no.183–185,

art.655), with subsequent modifications and completions, is repealed.

[Art.147 completed by Law no.180 of 25.07.2014, in force 15.08.2014]

PRESIDENT OF THE PARLIAMENT Marian LUPU Chişinău, 11 July 2012.

No.171.