KAZAKHSTAN STOCK EXCHANGE

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1 KAZAKHSTAN STOCK EXCHANGE Appendix R4 to Rules of Exchange Securities Trading A g r e e d o n with the Committee on Regulation and Supervision of the Financial Market and Financial Organizations of the National Bank of the Republic of Kazakhstan on July 7, 2011 Acting Chairman of the Committee on Regulation and Supervision of the Financial Market and Financial Organizations of the National Bank of the Republic of Kazakhstan K. KOJAKHMETOV Approved by Kazakhstan Stock Exchange JSC Board of Directors decision (minutes of meeting No. 12 of May 31, 2011) Effective from September 12, 2011 A g r e e d o n with Central Securities Depository JSC on June 15, 2011 President B. KAPYSHEV N O T I C E The Regulations below have been translated into English by employees of Kazakhstan Stock Exchange for information purposes only. In case of any incompliance of this translation with the Regulations original version in Russian, the latter prevails. R E G U L A T I O N S on Conducting Settlements on Securities Transactions under Т+0 Scheme with Full Backing (Gross Settlements) Almaty 2011

2 L I S T O F A M E N D M E N T S 1. Changes No. 1: agreed upon with the National Bank of Republic of Kazakhstan on April 24, 2014; approved by a decision of the Board of Directors of Kazakhstan Stock Exchange JSC (meeting minutes No. 14 of march 28, 2014); effective as of May 6, Changes and additions No. 2: agreed upon with the National Bank of Republic of Kazakhstan on July 29, 2014; approved by a decision of the Board of Directors of Kazakhstan Stock Exchange JSC (meeting minutes No. 26 of July 10, 2014); effective as of August 6,

3 These Regulations define the procedure of settlements on securities deals concluded during trading sessions at Kazakhstan Stock Exchange JSC (hereinafter the Exchange), as well as the procedure of conducting trading procedures related with the backing of transactions being concluded. Chapter 1. GENERAL PROVISIONS Article 1. Main Terms 1. The terms used in these Regulations mean the following: 1) "Liable Trading participant" a trading participant who failed to execute his responsibilities under the transaction he concluded (this sub-item was changed by a decision of the Exchange's Board of Directors of July 10, 2014); 1-1) "Position's Limit" is a restriction preventing a trading participant from arriving at a negative value of the position (this sub-item was included by a decision of the Exchange's Board of Directors of July 10, 2014); 1-2) "Operating Day" is part of a business day during which the Exchange carries out procedures on organization and administration of trades, clearing and settlements on transactions in financial instruments (this subitem was included by a decision of the Exchange's Board of Directors of July 10, 2014); 2) "Position" is an amount of money (money position) or number of securities (position in securities), registered respectively at money or trading accounts of a trading participant (and/or his clients) in the Exchange's trading system, whereas (this paragraph was changed by a decision of the Exchange's Board of Directors of July 10, 2014): "Entry Position" is a position indicating the amount of money (entry money position) or number of securities available in accounts of a trading participant at the Central Depository or in a position in the Inter-Bank Data Transmission System of the Republican State Enterprise "Kazakhstan's Center for Inter-Bank Settlements" (hereinafter the IDTS KCIS) designated for settlements upon trading being conducted by the Exchange; "Current Position" is a position indicating an entry position with account taken of deals and other transactions conducted by a trading participant in the Exchange's trading system as at the current moment of a trading day; "Plan Position" is a position calculated by the Exchange's trading system based on a trading participant's current position with account taken of (excluding) parameters of orders submitted by that trading participant to the Exchange's trading system; 3) "Confirmation System User" means a legal entity authorizing trading participants to conclude transactions through trading accounts belonging to its clients, carrying out settlements on such transactions and connected by the Exchange to the Confirmation system (this sub-item was changed by a decision of the Exchange's Board of Directors of July 10, 2014); 3-1) "Affected Trading participant" is a trading participant whose concluded transaction has not been executed due to failure of the liable trading participant to meet his obligations regarding that transaction (this sub-item was included by a decision of the Exchange's Board of Directors of July 10, 2014); 4) "Settlement Confirmation" means submission by a trading participant to the Exchange's trading system of additional confirmations of the readiness to fulfill: liabilities on a deal involving purchase (selling) of securities he 3

4 concluded earlier (day T-n), and/or fulfill liabilities on the transaction concluded by the trading participant at a special trading session for placement, purchase, buy-back or selling of securities arranged by the Exchange, on the day of settlements upon results of such trading session; (this sub-item was changed by a decision of the Exchange's Board of Directors of July 10, 2014); 5) "Confirmation System" is a set of software and hardware of the Exchange allowing persons connected thereto to obtain data on transactions in financial instruments (being) concluded in the trading system in the name of those persons, on behalf of those persons or in the interest of those persons or their clients and based on results of processing of such data to forward to the Exchange confirmations of such deals (messages about compliance of the deals' terms to terms on which or under which such deals had to be or could be concluded) or refusals to confirm such deals (this sub-item was changed by a decision of the Exchange's Board of Directors of March 28, 2014); 6) "Message of Readiness to Fulfill Liabilities on a Repo Transaction/Readiness Message" means submission by a repo transaction participant to the Exchange's trading system of the relevant confirmation of his readiness to fulfill his liabilities on the repo transaction (on a closing repo transaction or on transfer of a compensatory payment on a repo transaction); 7) "Trading Participant" is an Exchange member admitted to conclusion of transactions using the exchange's trading system and taking part in trading operated by the Exchange (this sub-item was changed by a decision of the Exchange's Board of Directors of March 28, 2014); 8) "Central Depository" means the Central Securities Depository JSC. 2. Other definitions used in these Regulations are determined by other internal documents of the Exchange. Article 2. Main Provisions 1. Settlement scheme Т+0 with full backing for securities transactions used at the Exchange, regulates the order of trading procedures and settlements stipulating that: 1) settlements on all securities transactions concluded at the Exchange, including initial offering of securities, settlements on repo transactions and transfers of compensatory payments on repo transactions are carried out on the day of conclusion of such deals, with exceptions provided by subitem 3) of this item; 2) submission by a trading participant of an order for conclusion of a securities purchase-selling deal to the Exchange's trading system with settlements to be made the same day, and/or submission of a settlement confirmation by a trading participant, as well as submission by a trading participant of a message of readiness to fulfill his liabilities on a repo transaction are only possible when money (securities) is (are) available on the trading participant's respective account, to the amount sufficient for conclusion of such deal or fulfillment of liabilities on such repo transaction (this sub-item was changed by a decision of the Exchange's Board of Directors of July 10, 2014); 3) settlements on deals concluded within special trading sessions for placement, purchase, buy-back or selling of a financial instrument operated by the Exchange are carried out within terms set by the Exchange's internal 4

5 documents regulating the procedure of conducting such special trading sessions and relevant settlements, or within terms set by respective decisions of the Exchange's Board of Directors. 2. Settlements on securities are carried out by the Central Depository in accordance with terms of these Regulations and internal documents of the Central Depository. 3. The Central Depository carries out settlements on deals based on orders for execution of such settlements coming in from the Exchange in the order provided by the respective agreement between the Exchange and Central Depository. 4. Settlements on transactions involving purchase-sale of securities and repo transactions are carried out in the gross settlements mode and executed separately on each deal, including opening and closing repo transactions in the real time mode without an offset of claims and liabilities on deals of trading participants (this sub-item was changed by a decision of the Exchange's Board of Directors of July Article 3. Classification of Trading Participants 1. For purposes of these Regulations securities trading participants are classified as follows: 1) the first group includes trading participants who in accordance with these Regulations are allowed to independently determine the entry money position in their trading accounts in the Exchange's trading system; 2) the second group includes trading participants whose entry money positions are determined by the Exchange based on data provided by the Central Depository. 2. The first group of trading participants includes Exchange members from category "stock market member", i.e. the National Bank of the Republic of Kazakhstan (hereinafter the National Bank), all banks of the lower (second) tier of the banking system of the Republic of Kazakhstan and JSC "Development Bank of Kazakhstan" (hereinafter the Bank/Banks). 3. The second group of trading participants includes Exchange members from category "stock market member", which are not banks (with the exception set in item 4 of this article). 4. A trading participant from the first group committing within 30 consecutive calendar days two instances of non-fulfillment of his liabilities on payment for securities purchased at the Exchange and/or on transfer of a compensatory payment on a repo transaction due to insufficient amount of money in his position at the IDTS KCIS, may be transferred into the second group. A decision to transfer a trading participant from the first group into the second one and term of such transfer is taken by the Exchange's Management Board based on results of consideration of all circumstances of that trading participant's failure to meet his obligations. 5. (This paragraph was removed by a decision of the Exchange's Board of Directors of July 5

6 Reverse transfer of a trading participant, represented by a bank from the second group of trading participants into the first group of trading participants is carried out automatically not earlier than 30 days after his transfer into the second group. However, the term indicated in these Regulations may be reduced based on a decision of the Exchange's Board of Directors. The Exchange shall notify the Central Depository of transferring a trading participant from the first group into the second group or vice versa, not later than the end of the business day preceding such transfer. 6. The procedure of transferring a trading participant from the first category into the second one specified by item 4 of this article, is not applied in case the National Bank is the trading participant No control is carried out on trade accounts of the National Bank in the trading system of the Exchange with regard to observing limits specified by these Regulations for trading participants. Article 4. Trading Participants' Accounts 1. For execution of settlements in securities a trading participant must have in the Central Depository a personal account and sub-accounts 1 opened in that personal account taking into account peculiarities provided for in item 1-1 of this article. For execution of cash settlements a first group participant must have a position 2 in the IDTS KCIS, a second group participant current accounts in the Central Depository. A first group participant must have correspondent accounts (his own and a client account) in the Central Depository which are used for execution of settlements in case of a transfer of that participant into the second group. Correspondent and current accounts of trading participants in the Central Depository are accounts to which the preliminary delivery of money (hereinafter prepayment accounts) is carried out Each sub-account of the trading participant opened in the Central Depository corresponds with a trading account which is opened in the Exchange's trading system for accounting of securities and money of the trading participant and/or his client designated for participation in the securities trading. For accounting of particular securities titles and money positional accounts are opened in the Exchange's trading system on each trading account. 1 Sub-accounts are used for accounting of own securities of the trade participant and/or securities of his clients (this footnote was included by a decision of the Exchange's Board of Directors of July 2 A position in the IDTS KCIS means a position which is used for accounting of money of the user of the IDTS KCIS system, transferred by him to the account of the IDTS KCIS in the National Bank (this footnote was included by a decision of the Exchange's Board of Directors of July 3 Prepayment accounts are used for accounting of money of a trade participant or money of his clients (this footnote was included by a decision of the Exchange's Board of Directors of July 6

7 2. In case of transfer of a trading participant from the first group into the category of trading participant of the second group, the Central Depository shall use such participants' correspondent accounts at the Central Depository for their money settlements. 3. Control over observation and execution of positions limits on trading participants' trading accounts is carried out in the Exchange's trading system (this item was changed by a decision of the Exchange's Board of Directors of July 4. The procedure of opening, maintaining and closing down of accounts mentioned in item 1 of this article is regulated by internal documents of the Exchange, the Central Depository and the IDTS KCIS. Chapter 2. CONCLUDING DEALS AND CONDUCTING SETTLEMENTS Article 5. Backing of Deals 1. (This item was removed by a decision of the Exchange's Board of Directors of July 2. Each day, before opening of securities trading, and according to the procedure and within terms set in the agreement between the Exchange and the Central Depository, the Exchange requests, and the Central Depository submits to the Exchange's trading system information about the balance (number) of securities available in sub-accounts of trading participants and amounts of money of trading participants available in their prepayment accounts at the Central Depository. Values of entry positions in the Exchange's trading system are updated according to data submitted by the Central Depository to the Exchange's trading system. 3. The Exchange's trading system ensures control of observation of positions' limits by way of monitoring entry positions, current positions and plan positions of trading participants, except for limits on money positions of the National Bank. 4. Checking of orders submitted by trading participants in special trading sessions for placement, purchase, buy-back or selling of securities as on whether the money is sufficient for making settlements upon results of conducting such trading sessions, is carried out by the Exchange's trading system on the day of executing settlements upon such special trading sessions and in the period of time specified in the terms of conducting such trading sessions. Trading participants shall carry responsibility for failure to execute settlements on special trading sessions due to insufficiency of money or securities on accounts of such participants. 5. On the day of conducting gross settlements on deals in securities concluded by trading participants on day T-n, such trading participants must submit to the Exchange's trading system the settlement confirmation on respective deals in order to confirm the sufficiency of money/securities of such trading participants. The settlement confirmation mentioned in paragraph one of this item must be sent not later than the time specified by terms of trade, or by the end of the operating day. 7

8 In case of untimely presentation or failure to present the settlement confirmation for securities purchase-sale deals made on day T-n, no settlements on such unconfirmed deals shall be effected. It means that deals are considered terminated due to non-presentation/untimely presentation of the settlement confirmation by the respective trading participant. Responsibility of a trading participant for non-fulfillment of such deals is determined in these Regulations and other internal documents of the Exchange. 6. Orders for conclusion of securities purchase (selling) deals, messages of readiness to fulfill liabilities on deals related to repo transactions, as well as settlement confirmations submitted by trading participants shall be rejected by the Exchange's trading system in case of exceeding values of fixed position limits (this item was changed by a decision of the Exchange's Board of Directors of July 7. A trading participant may use securities or money available in his accounts at the Central Depository for purposes other than execution of trading and settlements at the Exchange under scheme Т+0 with full backing only in case of absence of need for backing of deals he concludes during exchange trading in securities, or in case of absence of need for backing of repo transactions he executes in the Exchange's trading system in accordance with these Regulations. In case of need for use of securities or money available in a trading participant's accounts at the Central Depository designated for trading and settlements under scheme T+0 with full backing, for other purposes, that trading participant shall submit to the Central Depository a corresponding order, which can be executed only after the Exchange's trading system in a special way has checked such trading participant's compliance with positions' limits; and depending upon whether the result of such checking by the Exchange's trading system is positive or negative, the Central Depository shall execute such order or refuse such participant execution of his order. At the end of a trading day, the Exchange's trading system shall submit to the Central Depository information of the following: 1) irreducible money balances in trading participants' prepayment accounts; 2) irreducible balances of securities in trading participants' sub-accounts, which serve as backing for deals and/or open positions of trading participants and cannot be used by them without the Central Depository having obtained from the Exchange a permission to use such backing. 8. Trading participants from the first group are granted the right to independently determine values of entry money positions in their trading accounts in the Exchange's trading system. Values of those entry money positions must be sufficient for submission of orders for purchase-sale of securities, settlement confirmations, messages of readiness to execute liabilities on transfer of a compensation payment on a repo transaction and messages on readiness to execute liabilities on repo transactions. 8

9 Article 6. Changing Positions during Trading 1. During trading, trading participants have the possibility to increase or decrease the number of securities in their sub-accounts and the amounts of money available in their prepayment accounts at the Central Depository. Information about an increase in the number of securities or amount of money in trading participants' prepayment accounts shall be submitted by the Central Depository to the Exchange's trading system immediately after such an increase. A reduction in the number of securities available in sub-accounts or money in prepayment accounts of a trading participant at the Central Depository shall be carried out only after his positions' limits have been checked in accordance with terms set in item 7 of article 5 of these Regulations. 2. In case of emergence or availability of restrictions concerning financial instruments or money at disposal of a particular depositor of the Central Depository, being imposed by authorized government bodies, the Central Depository shall send a notification of a decrease in the number of securities available for making settlements and/or the amount of money available in accounts of such depositor. After the Exchange has received from the Central Depository a notification mentioned in the previous paragraph, the Exchange's trading system shall effect respective changes in trading participants' positions within the trading system and for the purpose of control of limits observation it will annul trading participants' active orders, if their positions' limits are breached as a result of a change in entry positions. In such case plan and current positions of trading participants shall be changed accordingly in the Exchange's trading system. In case of non-execution of settlements on deals concluded in the trading system as a result of a position change due to circumstances mentioned in the first paragraph of this article, responsibility for non-execution according to terms set in article 10 of these Regulations, shall rest with the deal's party on whose accounts the mentioned restrictions were imposed. 3. After receiving from the Central Depository information about an increase/decrease in the number of securities and money in trading participants' accounts at the Central Securities Depository, the Exchange's trading system shall increase/reduce corresponding entry positions of those trading participants in trading accounts (this item was changed by a decision of the Exchange's Board of Directors of July 4. Trading participants from the first group may independently change values of their entry money positions during trading, in accordance with terms set in these Regulations. The trading systems shall refuse a first group trading participant a possibility to change entry positions on money during trading, if such change causes nonobservation of position's limits. 5. The trading system shall accept orders, messages of readiness to fulfill liabilities on repo transactions, and settlement confirmations from trading participants only provided they observe their positions' limits as a result of acceptance of such orders, messages of readiness and settlement confirmations. At the time of acceptance of an order, message of readiness, or settlement confirmation from a trading participant, the Exchange's trading system shall change the value of plan positions on the trading account, for which such order, message of readiness or settlement confirmation was accepted (this paragraph was changed by a decision of the Exchange's Board of Directors of July 10, 2014). 9

10 Article 7. Carrying out Gross Settlements 1. At the moment of registering in the Exchange's trading system of a securities purchase (selling) deal, including initial securities offering deals, and/or deals concluded during a special trading session, and/or closing repo transactions, and/or messages of readiness to fulfill liabilities on a closing repo transaction from both sides of the repo transaction, and/or messages of readiness to fulfill liabilities on transfer of a compensatory payment on a repo transaction, the Exchange's trading system shall send to the Central Depository information on mentioned deals and compensatory payments on repo transactions in the form of settlement instructions At the same time trading participants' current positions shall not change until the moment of receipt from the Central Depository of information about execution of settlements on one deal or the other or with regard to transfer of a compensatory payment on a repo transaction 4. The Exchange's trading system shall send settlement instructions to the Central Depository separately on each transaction or on transfer of a compensatory payment on a repo transaction, in order of their registration in the Exchange's trading system. 2. After executing settlements according to settlement instructions received from the Exchange's trading system, the Central Depository shall inform the Exchange's trading system of conducting such settlements, reporting on each instruction. After receiving from the Central Depository messages of settlements executed on a particular deal and/or transfer of a compensatory payment on a repo transaction, the Exchange's trading system shall accordingly change values of trading participants' positions. The number of securities and amount of money in entry and current positions of trading participants in the Exchange's trading system is set in accordance with the message from the Central Depository. Article 7-1. Repeated Settlements on Deals 1. In case of non-fulfillment of liabilities on a transaction by one of its parties, the counteragent of the transaction shall receive by means of the Exchange's trading system a message of non-fulfillment of liabilities on the transaction by the other party and may at his discretion terminate that transaction at any time before the end of the trading day or agree to a repeated settlement on it. 2. Repeated settlements on a non-executed transaction are carried out at mutual consent of parties of such transaction after receipt of messages of readiness of their execution submitted to the Exchange's trading system by each of the parties of that transaction. (This item was included by a decision of the Exchange's Board of Directors of July 4 Until the moment of receiving from the Central Depository of information on execution of settlements on a deal or transfer of a compensatory payment on a repo transaction, plan positions of trading participants are calculated with taking account of parameters of that deal, for the purpose of eliminating the possibility of concluding other deals with the same assets of trading participants. After receiving the mentioned information from the Central Depository, the Exchange s trading system shall accordingly change current and plan positions of trading participants. (Numbering of this footnote was changed by a decision of the Exchange's Board of Directors of July 10

11 Chapter 3. SPECIFICS OF CONFIRMATION SYSTEM'S OPERATION Article 8. Procedure of Deals Confirmation by Confirmation System Users 1. Information on all securities purchase-sale deals, opening and closing repo transactions, orders submitted for participation in special trading sessions and messages of readiness to transfer a compensatory payment on repo transactions executed in the trading system over accounts controlled by users of the Confirmation System, is brought to the knowledge of those Confirmation System users by way of reflecting the said information in terminals of the Exchange's trading system used by those Confirmation System users (this item was changed by a decision of the Exchange's Board of Directors of July 10, 2014). 2. Securities purchase-sale deals, opening and closing repo transactions and messages of readiness to transfer a compensatory payment on repo transactions respectively concluded in the trading system and submitted to the trading system over accounts controlled by users of the Confirmation System, are sent by the Exchange's trading system to the Central Depository for settlements only provided that confirmations on such deals and readiness messages were received from those Confirmation System users if such confirmations were compulsory according to the Rules of Exchange Securities Trading and Rules of Repo Transactions Execution (this item was changed by a decision of the Exchange's Board of Directors of July 3. A Confirmation System user should send to the Exchange's trading system a confirmation or refusal to confirm a securities purchase-sale deal, opening or closing repo transaction, an order submitted for participation in a special trading session and a message of readiness to transfer a compensatory payment on a repo transaction not later than the end of operation of the Confirmation System, specified by the Regulations of Trades and the Confirmation System Operation 5 (this item was changed by a decision of the Exchange's Board of Directors of July Article 9. Non-Confirmation of Deals by Confirmation System Users 1. In case a refusal has been received from a Confirmation System user, such deal shall be terminated. 2. In case no confirmation or no refusal to confirm were received from a Confirmation System user with regard to deals until the expiry of time specified by Regulations of Trades and the Confirmation System Operation, the Exchange shall consider this fact as receiving a refusal from that user to confirm such deals. 3. Responsibility for termination of the deal due to a refusal of the Confirmation System user to confirm that deal is assigned to the trading participant that concluded such deal on a trading account belonging to that Confirmation System user. 4. The trading participant whose responsibility includes the transfer of compensation payment on a repo transaction is responsible according to the Rules of repo transactions execution. However, a transfer of the compensation payment on s repo transaction is not carried out in the following cases: 1) a refusal was received from a Confirmation System user to confirm the message of readiness to transfer the compensation payment on a repo transaction; 5 Approved by a decision of the Exchange's Management Board (meeting minutes No. 17 of January 27, 2012) this footnote was changed by a decision of the Exchange's Board of Directors of July 11

12 2) the term specified in in item 3 of article 8 of these Regulations was violated in spite of provision of the message of readiness to transfer the compensation payment on a repo transaction. 5. The Confirmation System user refusing or failing to confirm a securities purchase-sale transaction, an opening (closing) repo transaction, refusing to confirm the message of readiness to transfer the compensation payment on a repo transaction by the deadline specified in item 3 article 8 of these Regulations, must not later than the next business day provide to the Exchange a letter indicating reasons for non-confirmation or refusal to confirm. 6. At violation by a Confirmation System user of the deadline for provision of a confirmation or refusal to confirm a securities purchase (selling) deal, an opening or closing repo transaction, a message of readiness to transfer a compensatory payment on repo transactions, he shall be liable to pay within five business days from the deal conclusion date a fine (penalty) in favour of the Exchange, to the amount of 50 MCI (Monthly Calculation Index). 7. A Confirmation System user cannot refuse to confirm a securities purchase (selling) deal, an opening or closing repo transaction, a message of readiness to transfer a compensatory payment on a repo transaction due to the trading participant having no money or securities, since the Exchange's trading system carries out control of limits of positions of the trading participant when receiving from him orders for conclusion of securities purchase (selling) deals, opening or closing repo transactions or messages of readiness to transfer a compensatory payment on a repo transaction. Chapter 4. TRADING PARTICIPANTS' RESPONSIBILITY FOR NON-FULFILLMENT OF THEIR LIABILITIES ASSOCIATED WITH DEALS Article 10. Responsibility for Non-Execution of Deals 1. A trading participant carries responsibility for non-execution or improper execution of his liabilities associated with deals he concluded in the Exchange's trading system, including those made at the account and on behalf of his clients. 2. The deal on which a trading participant failed to execute his liabilities by the end of an operating day of the Exchange, also when conducting repeated settlements, shall be terminated. 3. In case of receipt from the Central Depository of a notice in accordance with terms set in item 2, article 6 of these Regulations, and ensuing impossibility to execute settlements due on a deal concluded by an Exchange member, such deal of that Exchange member shall be deemed terminated. 4. The responsible trading participant must within five business days from the deal termination date must pay a fine (penalty) to its counterparty, equaling to 5.0 % of the terminated deal's amount (except for cases indicated in items 5 and 6 of this article) to the affected party, if he has a claim for payment of that fine (penalty). 5. In case the affected trading participant refused a repeated settlement on the deal, the responsible trading participant must pay to him a fine (penalty) to the amount of 0.5 % of the amount of the unexecuted deal if he has a claim for payment of that fine (penalty). 6. Peculiarities of execution of opening and closing repo transactions, as well as responsibility of participants of such deals for undue execution of liabilities on them are specified by the Rules of Repo Transactions Execution. 12

13 7. In case of repeated settlements on an executed deal, the trading participant that caused the repeated settlements, must pay a fine (penalty) of 50 MCI in favor of the Exchange. Article 11. Procedure of Payment of Fine (Penalty) 1. At termination of a deal, the responsible trading participant must pay to the Exchange the full amount of commission fees on the unexecuted deal, calculated for both parties of that deal, in accordance with the terms of specified in internal documents of the Exchange, and without account taken of any preferences provided regarding payment of commission fees of the Exchange. 2. The affected trading participant may within five business days from the date of conclusion of securities purchase-sale deal provide to the Exchange a written notice on availability of claims against the responsible trading participant with regard to payment of fine (penalty) for non-execution of that deal. In doing so: 1) in case within the indicated term the Exchange shall not receive such n notice, it shall consider this fact as an evidence of absence of claims of the affected trading participant against the responsible trading participant on that deal; 2) in case within the indicated term the Exchange shall receive such notice, it shall not later than the second business day following the date of receipt of such notice, notify the responsible trading participant of the need to pay the fine (penalty) and present an invoice for its payment. 3. The responsible trading participant shall transfer to the Exchange's correspondent account in the National Bank the amount of fine (penalty) not later than the fifth business day following the date of receipt of the notice provided for in sub-item 2) of item 2 of this article. 4. The Exchange within two business days following the date of arrival of the amount of fine (penalty) to its correspondent account in accordance with item 3 of this article, shall transfer this amount to the affected trading participant according to bank details indicated in the penalty claim. (This article was included by a decision of the Exchange's Board of Directors of July Article 12. Settlement of Disputes regarding Issue of Payment of Fine (Penalty) 1. If parties of an unexecuted deal have disputes regarding payment of fine (penalty), each trading participant within five business days from the date of conclusion of that deal may send to the Exchange a request for bilateral settlement of such disputes and disclosure to him with this purpose of information on the counterparty of the terminated deal. 2. When receiving the request provided for in item 1 of this article, the Exchange: 1) shall send to the deal counterparty a request for provision of his consent for disclosure of information on himself; 2) having received consent from the deal counterparty for disclosure of information on himself, shall inform the other party of the deal on the title of the deal counterparty for bilateral settlement of disputes. 3. If the parties of the terminated deal agree to bilateral settlement of disputes regarding payment of fine (penalty), both parties must send to the Exchange written statements of absence of mutual proprietary claims on that deal and statement of the affected trading participant about refusal to receive fine (penalty) payable to him. 13

14 4. In case of disagreement of one of the deal parties to bilateral settlement of disputes, that party: 1) shall send to the Exchange a written statement of refusal to bilaterally settle disputes regarding payment of fine (penalty); 2) may turn to the Commission on settlement of disputes and conflicts with a statement on settlement of disputes regarding payment of fine (penalty). 5. The affected trading participant is obliged to pay fine (penalty) not later than five business days following the day of taking a decision by the Commission on settlement of disputes and conflicts, if not otherwise specified by the decision of the Commission on settlement of disputes and conflicts or agreement between the parties. 6. The procedure of consideration by the Commission on settlement of disputes and conflicts of disputes arising in the course of execution of deals in financial instruments, is provided for in the relevant internal document of the Exchange 6. (This article was included by a decision of the Exchange's Board of Directors of July President K. Damitov 6 The procedure of settlement of disputes and conflicts arising in the course of execution of deals in financial instruments, approved by a decision of the Exchange Board of Directors (meeting minutes No. 10 dated May 28, 2012) (this footnote was included by a decision of the Exchange's Board of Directors of July 10, 2014). 14