RULES ON THE MANNER OF CONDUCT OF OPERATIONS OF AUTHORIZED SECURITIES MARKET PARTICIPANTS

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1 Pursuant to Article 80 and in connection with Article 78 of the Law on Securities ("Official Gazette RMNE", No. 59/00 and 28/06), Securities and Exchange Commission (hereinafter referred to as: the Commission), at its 157 th session held on November 20, 2009has adopted RULES ON THE MANNER OF CONDUCT OF OPERATIONS OF AUTHORIZED SECURITIES MARKET PARTICIPANTS ("Official Gazette of Montenegro", Nos. 78/09 of 27/11/2009, 87/09 of 30/12/2009, 72/10 of 08/12/2010, 24/11 of 13/05/2011, 29/11 of 17/06/2011, 32/11 of 01/07/2011, 49/11 of 14/10/2011) Article 1 These Rules shall govern the manner of conduct of operations with securities traded on a stock exchange which has its registered office in Montenegro. These Rules shall apply to authorized securities market participants, having its registered office in Montenegro and to subsidiaries of foreign legal entities dealing in securities in Montenegro (hereinafter referred to as: authorized participant), provided that, when a certain rule is applied in certain situations, it shall solely relate to authorized participants for which that situation is relevant, taking into account dealing in securities which those authorized participants, in accordance with their operating license, may carry out. The provisions of these Rules shall apply to banks with registered office in Montenegro licensed to trade in securities and in connection with the performance of these tasks. Manner of conduct of operations Article 2 Authorized participant, in conducting its operations, must ensure obtaining information from the stock exchange, and in one of two following ways: - to be a member of the stock exchange; or - to have an active visual access to information from the stock exchange. Article 3 Authorized participant shall provide necessary information about client's identity and address, as well as the identity and status of employees and other relevant persons the client has contact with. 1

2 Agreement on dealing in securities Article 4 Authorized participant shall carry out purchase and sale of securities based on General agreement on dealing in securities entered into with a client - the principal in writing and based on buy and sell orders for each individual transaction. Authorized participant shall enter into agreement referred to in paragraph 1 of this Article at its registered office or a subsidiary before taking orders for purchase/sale of securities, thus binding itself to execute transactions in securities upon the client's order and on its behalf, and the client agrees to pay commission for provision of these services. Authorized participant may enter into agreement on dealing in securities, i.e.receive a buy or sell order through a power of attorney if the power of attorney is given and certified in accordance with the law. Client identification Article 5 Authorized participant shall, at the conclusion of the agreement on dealing in securities and prior to taking over each order for purchase/sale of securities, carry out client identification in accordance with the law governing measures against money laundering, and in order to prevent illegal activities on the capital market. Legal perosn's identity checks also include identity checks of the person authorized to represent a legal person. If the client is represented by a proxy, a power of attorney must be certified by a competent authority. The orginal power of attorney document, i.e. documentation proving the status of a legal representative or guardian shall remain in the file at the authorized participant. Authorized participant is not allowed to give advice in connection with transactions in securities, or execute transactions on behalf of the client, until determines to know all the facts that should be disclosed to it by the client and other relevant facts regarding a client it is, or should be, aware of. Article 6 Authorized participant shall ensure that any agreement and other types of written communication or information sent or provided by the client on whose behalf it executes transactions in securities are drawn up in a comprehensive and clear manner. Mandatory elements of the agreement on dealing in securities are: a) data on authorized participant: name and registered office of authorized participant, the first and the last name of the person authorized to sign the contract; b) data on client: 1. the first and the last name, address and identity card number for natural person, i.e.business name, registered office, registration number and a name of the person authorized to represent legal person, 2

3 2. telephone number, fax number and address, 3. name of the bank and number of bank account, 4. the first and the last name, address and identity card number of the person authorized to sign securities buy or sell orders; 5. the first and the last name, address and a passport number if the ordering party is a foreign natural person; c) unambiguous description of subject-matter of the agreement; d) identification code or other instrument of identification, which serves for the purpose of verification of each order, which shall be known only to authorized participant and the client, i.e. client's authorized persons; e) a way of order delivery and a manner of identification or a manner of identitfication code verification; f) a manner and deadline for informing the client by authorized participant on entry of orders into the stock exchange trading system as well as on execution of orders; g) a manner and deadline of delivery of client's commission calculation by authorized participant, as well as elements of the calculation; h) a manner and deadline for payment of commission for provision of authorized participant's services; i) the manner of agreement termination; j) a manner of potential dispute resolution, i.e. determination of the court competent for any disputes; k) date of conclusion of the agreement and the signatures of the parties hereto. A client - a natural person, in addition to the agreement on dealing in securities shall enclose the following: - a certified copy of a valid photo identification document (for example, passport, driver's license); - a copy of bank account card from a bank where the customer opened a bank account; - custody account data if the customer has a custody account; - other documents as determined by the authorized participant's rules. A client - a legal person, in addition to the agreement on dealing in securities shall enclose the following: - original of decision on entry in court register document or its certified copy, with the name and the basic identification data of the person authorized for representation and the person authorized to sign securities buy or sell orders, - a certified copy of the identity document of the person authorized for representation; - a form with a certified signature of the person authorized for representation; - certificate of registration with tax administration (tax identification number-tin); - name of the bank in which the client opened a bank account and a bank account number; - other documents as determined by the authorized participant's rules. Foreign legal persons shall submit the documentation referred to in paragraph 4 of this Article, certified by a competent authority and translated by a certified court interpreter. Type of orders, a manner of their receipt and other issues related to securities buy/sell orders shall be prescribed by the rules on stock exchange operations and authorized participant's rules. 3

4 Article 7 Authorized participant shall not, in the agreement or in other type of written communication, require exclusion or limitation of: 1) any obligation or responsibility towards a client, which it has under any law or under Securities and Exchange Commission's rules; 2) any obligation to deal in securities with due professional care; 3) any other obligation towards the client for failure to perform tasks related to dealing in securities. Exclusion or limitation contrary to paragraph 1 of this Article is null and void and of no legal effect. Article 8 Authorized participant shall pay special attention to prevention of conflicts of interest in the performance of activities related to investment analysis and consulting, its own trading, securities portfolio management and other transactions in securities, including issuance or sale of securities. When an authorized participant deals in securities on behalf of a client it may not claim to be independent or impartial if it is not. Authorized participant shall, in determining circumstances which constitute or may give rise to conflicts of interest take into account, in particular, the following situations that may involve a conflict of interest either as a result of carrying out activities or for other reasons: 1) authorized participantand/orexecutive director of an authorized participant, the employed in authorized participant, or shareholders of an authorized participant (hereinafter referred to as: other persons) may achieve financial gain or avoid loss at the expense of the client; 2) authorized participantand/or other personshave interest or benefit from the outcome of the work performed for the client or transactions executed on behalf of the client, which is distinct from the client's interest; 3) authorized participantand/orother persons have financial or other incentive for favoring interests of another client or a group of clients to the detriment of client's interests; 4) corporate objective of an authorized participant or other person is identical as one of the client; 5) authorized participantand/or other persons receive or will receive from a person who is not a client an additional incentive based on work done for the client, which is not the usual commission or fee for that work. Article 9 When an authorized participant has a material interest in dealing in securities performed on behalf of the client or any other connection that may give rise to conflict of interest in connection with that work, it may not perform that work if he failed to take appropriate activities to ensure that neither material interest nor connection may have effect contrary to client's interests. 4

5 In order to ensure that neither material interest nor connection may have effect contrary to client's interests, it is necessary that authorized participant undertakes: - procedures to prevent or control the exchange of information between the persons involved in activities that are characterized by a potential conflict of interest, and where the exchange of information could prejudice interests of one or more clients; - measures, preventing any person to have inappropriate influence in a way in which dealing in securities is performed; - measures, preventing or supervising simultaneous or sequential participation in various transactions in securities, if such participation may have a negative influence on managing conflicts of interest. Article 10 Authorized participant shall inform the client of the existence, nature and source of conflict of interest and before carrying out transactions on its behalf and for the account of the client. Notification referred to in paragraph 1 of this Article shall contain sufficient information enabling the client to make decisions related to transactions in securities in the context of occurence of conflict of interest. Authorized participant shall provide the notification referred to in paragraph 1 of this Article in writing. Authorized participant may not execute orders for its own account, for the account of authorized participant's member or other person employed by an authorized participant if it would not be able to simultaneously execute clients' orders or if it would cause clients' orders to be executed under less favorable conditions. Authorized participant: Article 11 1) may not recommend transaction to the client, or execute transaction for it unless takes over activities to ensure that the client understands the risks involved, 2) may not improperly specify any advantage or disadvantage of the transaction intended and 3) may not guarantee profit, unless it is contractually guaranteed. In order to ensure that the client understands the risk that exists, an authorized participant is required to: - become familiar with the client's financial situation, its investing experience and other circumstances related to the client in order to provide adequate services to the client; - make information available to the client (including information regarding risks) required for making appropriate investment decisions. Article 12 The Commission may prescribe a special procedure in the case of performance of securities portfolio management, which an authorized participant is obliged to implement. Authorized participant shall not provide clients with services in connection to securities relating to: 5

6 1) management of securities portfolio, except when it carry out those activities as an investment manager or underwriter, or 2) other types of activities for which the Commission determines that may not be carried out by an authorized participant. Article 13 Authorized participant may not knowingly earn profit or draw benefit, neither for its own account and the account of the client nor to any third party, from insider information possesed by any of its authorized employee, or assist anyone who is in possession of such information in order to have benefit for itself. Article 14 All forms of advertising and communications of authorized partcipants are based on principles of good faith and fair dealing and shall include the basis for the facts being exposed. Exaggerated statements, statements with no real background or misleading statements are prohibited in public communication. Authorized participant shall not, in any form of public communication, publish or transmit any information which it knows or assumes to contain false information nor shall omit material facts if their omission would lead communication to be interpreted ambiguously. When participating in seminars, radio or television interviews, or in any other manner publicly present themselves, authorized participants shall comply with the rules set out in paragraphs 1 and 2 of this Article. Article 15 Before commencemet of authorized participant's activities for the client, it shall familiarize it with the percentage or amount of authorized participant's commission and legal nature and the amount of any other fee payable to the stock exchange, the Central Depository Agency Podgorica (hereinafter referred to as: the CDA), custody, bank or other persons. Article 16 Authorized participant shall keep a separate record in which it shall enter chronologically all complaints received by clients, containing the following information: 1) the first and the last name and address, i.e. business name and a registered officeofa complainant; 2) date of receipt; 3) how complaints were handled and in which term. Authorized participant shall act in accordance with clients' complaints promptly and with due diligence. Authorized participant shall determine its internal procedure that allows proper handling of customers' complaints and ensure that these activities are undertaken in the shortest possible term. 6

7 Article 17 Authorized participant shall ensure that none of its employees do not offer or give, ask for or accept any inducement that could affect acting contrary to prescribed or contractual obligations towards the client. Authorized participant shall establishe and implements the following procedures: 1) supervisionover the work of each of its employees and/or other persons performing activities of authorized participants on its behalf; 2) procedure which provides that the aforesaid persons do not give advice or provide services they are not authorized for, 3) provision of appropriate education of authorized persons and employees and other training necessary for their operations in a responsible and competent manner in communication with prospective investors in securities. Article 18 Trading in security shall commence on the day following the day when the CDA notifies the stock exchange on the assignment of trading symbol to that security. Article 19 Authorized participant shall not refuse an order consistent with the law and regulations of the Commission and shall act in accordance with the conditions specified in the client's order. Authorized participant may enter a sell order to the stock exchange trading system and execute certain securities sell order on its behalf and for the account of the client, or on its behalf and for its own account, unless the securities are registered on a proprietary account of the person giving the order, or on whose behalf an order is given, in the amount specified in a sell order. Only when securities are transferred from a securities holder's account in a central registry of the CDA to an authorized participant's account in the CDA, the authorized participant may execute a sell order. Client's order shall contain all the necessary data for a smooth and clear execution, such as: 1) indication of order receipt, 2) the first and the last name of the client, its unique master citizenship number and the address, 3) number of client's account with CDA; 4) date and time (hour and minute) of order receipt, in the case referred to in Article 24, paragraph 1 of these Rules and the date and time of order delivery; 5) ISIN code; 6) type of order (buy, sell); 7) type of the order with respect to price and validity period; 8) the amount of securities; 9) the name of the bank and number of client's bank account to which client's funds will be paid; 10) price of securities at which an order shall be executed; 11) other potential requirements for execution of the order; 7

8 12) name of the authorized participant and its subsidiariy, i.e.legal person referred to in Article 24., paragraph 1. of these Rules in which the client, i.e through which the client placed its order. Authorized participant shall enter an order containing all the necessary information into the stock exchange trading system within the time specified by the client. In case that the client did not specify the term for order entry, the order shall be entered without delay and no later than the next business day, before commencement of trading on the stock exchange, with respect to sequence of orders received. Notwithstanding paragraph 1 of this Article, the authorized participant is entitled to refuse the client's order in the following cases: - if an order does not satisfy prescribed conditions set forth in these Rules and the agreement, i.e. if all the required information needed for its execution wer not submitted; - if determines, in the case of securities buy order, that the client does not have sufficient funds for the purchase of securities subject to the order; - if an order was not properly signed or wasnot signed by an authorized person; - if an authorized participant suspects money laundering and terrorist financing ; - if an authorized participant considers that execution of the order may result in market manipulation; - if execution of an order would be contrary to applicable legislation, rules of the Commission and other documents. If an authorized participant refuses to accept an order, it shall, in writing or by electronic means, notify the client about the circumstances not later than the day following the receipt of the order, stating the specific reason for refusal of the order. Article 20 When placing a sell order the client shall provide the authorized participant with its bank account number to which the authorized participant is obliged to deposit the funds from the sale of securities carried for the account of the client. Authorized participant is obliged, immediately upon settlement of the transaction and on behalf and for the account of the client, to pay the funds received on behalf and for the account of the client out of its clients' account to the account of the client on whose behalf it executed securities transaction. Authorized participant shall not pay the funds received from the sale of securities to the account of a person who is not the client for whose account securities transaction was executed. Notwithstanding paragraph 2 of this Article, the client whose place of residence or registered office is outside of Montenegro, while giving a sell order, shall provide an authorized participant with instructions on whether it wants the authorized participant, upon settlement of transaction in securities, to pay the funds received on behalf and for the account of the client, out of its clients' account to the account of the client on whose behalf it executed sale of securities or wants the authorized participant to keep the funds received on its clients' account. Authorized participant is required to act immediately upon the instruction given. 8

9 When giving a buy order a client gives instruction to the authorized participant on whether it wants to keep securities purchased for its behalf in the depository of CDA for further trading or wants to transfer securities to its account in the central register of CDA. Authorized participant is required to act immediately upon the instructions given. The burden of proof of the existence of instructions referred to in paragraphs 3 and 4 of this Article shall fall on the authorized participant. If the client has not given a specific instruction, the authorized participant shall immediately, upon execution of a buy order, transfer securities to the central register of the CDA. Where more persons are authorized to represent a legal person - authorized participant's client and/or for disposal with money and securities owned by that client (collective power of attorney), the authorized participant shall equire a written consent of all other persons from an authorized representative or an agent who submits securities sell/ buy orders. Article 21 When the authorized participant executes a client's order, it is obliged to perform it in a way that is the most favorable for a client in the shortest possible period and in accordance with the circumstances, i.e. immediately upon receipt of the order and its entry into the order book. Acceptance of orders Article 22 Authorized participant shall receive customers' orders to buy or sell securities in its registered office, i.e. in its subsidiary where buy or sell securities orders are received and executed. Types of orders that may be given by the client are determined by stock exchange and authorized participant's rules. An order may be given in person, by fax, by and by phone and in any other manner prescribed by authorized participant's regulations. When the order was given by a telephone, authorized participant shall, within the period of three days of the order receipt, provide a signed order of the client, or an order signed by its authorized representative. Notwithstanding paragraph 4 of this Article, when a client has a residence or a registered office outside of Montenegro, authorized participant may, within the period of three days, instead of a handwritten signature, providing a client's , unambiguously confirm that the client gave his order by phone. It shall be considered that the order was received when it is delivered to the authorized participant's registered office or its subsidiary that receives and executes orders of the authorized participant. 9

10 Authorized participant shall, upon the receipt of an order, provide evidence of receipt of an order, time of receipt and entry in the order book, and is responsible for the failure to provide this evidence, as well as for erroneous and incorrect entry of orders and for any acting that is not in accordance with the expressed client's will in the order. Client that gives his orders by phone, fax or may give the same using authorization by identifiaction code assigned to the client by authorized participant when signing the agreement. The client is obliged to keep identification code as a secret and shall not make the same available to third parties. Authorized participant is required to verify the client's identity through identification code contained in any agreement, which provides for the possibility of placing orders by phone, by fax or by electronic means or otherwise, that does not include the presence of the client. When contracting receiving orders electronically, authorized participant is required to provide: - a reliable method of identifying the client; - that all essential elements of an order are listed in the electronic message; - a record about time of order receipt by and time of its entry into the order book; - sending reply to a received order, showing the original message of order sender. When contracting receiving orders by telephone, fax or in electronic form, authorized participant shall reserve the right, if the order is vague and/or ambiguous, to refuse execution of the order and shall inform the client thereof in the same way in which he received the order. When contracting receiving orders by telephone, authorized participant shall reserve the right, if suspects that client's hadwritten signature may not be obtained within the period of three days, i.e. an e- mail from a client by which a client undoubtedly confirms that the order was given by phone, to refuse execution of a client's order. Confirmation of the receipt of order Article 23 Authorized participant shall submit or deliver to the client the evidence - confirmation of the receipt of order that contains all the required elements of an order set out in Article 19 paragraph 4 of these Rules. Authorized participant shall send the confirmation of the receipt of order to the client at the latest during the next business day following the day of the receipt of an order. Authorized participant shall issue a confirmation of the receipt of order in writing with the signature of the person authorized for order receipt. Exceptionally, if transmission of order is made electronically or by fax a confirmation of the receipt of order shall be delivered in a manner in which a specific order was given and/or in other manner established in the agreement entered into between the authorized participant and the client. Proof of evidence on sent confirmation of the receipt of order shall fall on the authorized participant. Provisions of this Article shall accordingly apply also in the case of change or cancellation of the order. 10

11 Article 24 Notwithstanding Article 22 paragraph 1 of these Rules, a client may also give its order out of place of order execution, as follows: - in authorized participant s subsidiarythat accepts orders, or - through other legal person authorized to accept clients orders on behalf and for the account of an authorized participant. If the authorized participant receives an order out of place of order execution in accordance with paragraph 1 of this Article, the order must be delivered on the same day into the authorized participant's registered office, or subsidary that executes clients' orders. In this case, orders shall be delivered by fax, ellectronically or through information system of the authorized participant and entered into the order book with respect to sequence of orders received, and the original documentation (agreement on dealing in securities, securities buy or sell order) shall be submitted to authorized participant's registered office within the period of 7 (seven) days following the date of receipt of a particular order. In the case referred to in paragraph 1 of this Article it shall be deemed that the order is received when the order is delivered into the authorized participant's registered office, or subsidiary that executes clients' orders. The client must be explicitly warned to this fact when submitting orders. Order book Article 25 The order book shall be kept in electronic form and shall remain in the authorized participant's premises. Entry of orders in the order book shall be arranged according to chronological order of their receipt and orders shall be enumerated by corresponding ordinal number. Authorized participant is obliged to keep the order book in electronic form. Authorized participant is required to have an information system (order book) which provides for accuracy and control of input data (orders), which does not allow for changes of data entered in the order book. Commission may control the software used by authorized participant for dealing in securities to determine its adequacy for performance of these tasks as well as reliability, safety and inability for misuse of the software. Insight into the order book and certain orders shall be carried by the Commission during control of authorized participant business operations. Authorized participant is required to submit to the Commission a certified printiout from the order book in paper form and/or electronically. A manner of delivery of data from the order book shall be prescribed by the Commission in each individual case upon its request. The Commission may alo require submission of other data electronically. Authorized participant shall, at the client's request and without delay submit to the client a certified printout of the order book, which refers to that client's orders, in paper form and/or in electronic form. 11

12 Article 26 Authorized participant is required to record all received orders in the order book. If the order is only partially executed the remaining portion shall keep its order in the order book. In the case of a partial execution of each individual of orders for each individual execution the date and precise time of execution, executed quantity and prices at which transaction was executed shall be entered into the order book. Any modification, refusal, cancellation and information about the order execution shall be entered in the order book. Article 27 Authorized participant must accurately execute client's order, according to the order in the order book. When an authorized participant matches customer's order with its own order or the order of another client, in that case: 1) itmay not give an unfair advantage to itself or to any client for whom it operates, and 2) if all the orders may not be executed, priority is given to execution of client's orders. Manner of execution of orders, orders balance, the order of execution of orders, types of orders, time and place of closed date and pricing of securities are regulated by the rules of the stock exchange. Article 28 Authorized participant shall send to the client a calculation of transactions in securities not later than during the next business day after the fulfillment of obligations arising from transactions concluded for the account of the client (i.e. not later than T+1). Authorized participant is required to keep records on calculations sent for transactions executed for the account of that client. Calculation referred to in paragraph 1 of this Article shall contain the following information: 1) the first and the last name, i.e. a business name of the client, 2) the number of client's account with CDA, 3) the type of security, 4) the amount, 5) the price, 6) type of business (buying and selling), 7) date and time of closed date, 8) calculation of commissions, specifying costs and accounts to which it will be paid, 9) client's bank account number to which funds, in case of sale of securities, are paid, as well as the name of the bank, 10) a signature of the responsible person in the stock exchange. Authorized participant shall submit to the client a calculation for transactions executed in the same manner in which it submits a certification on the receipt of order. 12

13 Article 29 When authorized participant operates as an investment manager for the client, it shall, in agreed terms, submit a report containing the value of the securities portfolio and value of funds in the client's account disposed by an investment manager on behalf and for the account of a client, at the beginning and at the end of a certain period and changes in structure between these dates, at the client's request. Article 30 Authorized participant shall, before the expiry of the term of 6 (six) months after the date of giving order by the client and entry of the same into the trading system of the stock exchange, inform the same on expiration of the term of an order entered into the trading system of the stock exchange and shall provide record keeping thereof and shall require from the client a written statement whether it retaines or withdraws the order. If the client in the case referred to in paragraph 1 of this Article states that it wants to retain the order, such order shall not be deemed as a new one and shall keep the same time period and the priority also after the expiration of the term of 6 (six) months following the date on which it is given. Stock Exchange report on executed transactions Article 31 At the end of each trading day the stock exchange shall draw up the report on all transactions concluded on the trading day. Not later than the beginning of the next trading day, the stock exchange and the authorized participant shall sign and certify the report referred to in paragraph 1 of this Article, if they agree with the same or shall make comments to it, if any. If authorized participant fails to sign and certify the report referred to in paragraph 1 of this Article or does make its comments, it shall be deemed that the report is acceptable. Stock exchange shall submit the report referred to in paragraph 1 of this Article to the Commission not later than twelve o'clock on the next trading day. The report referred to in paragraph 1 of this Article shall contain, according to the following structure and sequence: 1) symbols and the number of securities that are the subject of transactions; 2) the time of execution of transactions, 3) the price of securities realized per each individual transaction; 4) the type of client's order; 5) the number of client's order; 6) authorized participant business name; 7) unique official exchange rate calculated in accordance with the stock exchange rules; 8) and other information imposed by the Commission in order to provide complete data for execution of client's orders and settlement of transaction. 13

14 The report referred to in paragraph 1 of this Article shall be submitted to the Commission in electronic form. Clearing and settlement Article 32 Obligations arising from transactions in securities executed on the stock exchange shall be completed thrugh CDA in accordance with the CDA's rules. Article 33 Authorized participant shall open the client's securities account with the CDA, in accordance with the CDA's rules. Payment of funds from transactions in securities executed on the stock exchange in the secondary trading shall be made through the CDA in accordance with the CDA's rules. Notwithstanding paragraph 2 of this Article, the Commission may, in certain cases, also approve other means of payment of funds as deems expedient. Article 34 Client's money is money that authorized participant receives or holds on behalf of the client's in order to execute transactions in securities. Authorized participant who receives client's money shall keep the same in the client's account opened with the competent institution. Clients' accounts shall be kept separately from any account where authorized participant keep its money. Authorized participant shall settle all financial claims against the client in respect of commission out of client's funds. Authorized participant is required to settle monetary claims against the client regarding commission for its services by pulling funds from client's cash account to authorized participant's cash account within the period of 7 (seven) days following the date of accrual of the claim, i.e. execution of service for which the commission is calculated. Authorized participant is obliged to keep analytical records on the balance of money in the account of each individual client, time of calculation and manner of commission payment. Client's money is not a part of authorized participant assets and may not be used for payment of authorized participant's liabilities Article 35 Authorized participant shall take care of client's money in an adequate manner and continuously, ensuring, in particular, the following: 1) that client's money and the money that does not belong to the client are kept separately; 14

15 2) that it is known at any time how much money is held in each client's account; 3) that money which belongs to one client is not used for another client; 4) putting money at the client's disposal at its request; 5) informing the client of the amount of funds in its account, at its request; 6) that client's money is used only for execution of liabilities of payment on behalf and for the account of the client; Article 36 Money may be withdrawn from the client's account only if: 1) there is a written order of the client or its representative; 2) is properly specified for payment for or on behalf of a client; 3) is properly transferred to another client's account or its bank account, or 4) it is not the client's money. Special documentation kept by the authorized participant Article 37 Authorized participant shall keep adequate record on documentation proving executing transactions in securities, whether executed on its or on someone else's behalf, which should be such as to enable, with reasonable accuracy, at any time, defining the state of dealing in securities and determining the financial position of the authorized participant. Article 38 Authorized participantshall keep the following documentation: 1. With respect to the client: 1.1. Client records, which should, in particular, contain the following information on clients: name of a client, address of its registered office or place of residence, phone number and unique personal identification number or other identification number; 1.2. Registrar of the client, which shall be kept, maintained and kept separately and in special manner for each client, containing the following: - agreements entered into with the client, stating the rights and obligations of the client and all the details and important information about services rendered for it, and shall not contain any provision requiring the client to waive any right that belongs to authorized participant's obligations according to it, - client's orders, whether executed or not; - analytical record of all payments on behalf and for the account of the client, and according to client's orders; - calculation of tasks performed for the client; - all written communications furnished to the client, or received from it, either by mail, fax or , including clients' complaints and handling the same; -evidence relevant to the use of securities as collateral, and 15

16 - any other documentation relating to the client itself and to dealing in securities for performed for the client; 2. With respect to securities, the order book whereall orders received in chronological order are listed by date of their receipt and in which the following data shall be entered: - Serial number in the order book, - The last and the first name, address, registration number of the identification document for natural person, or business name, address, the last and the first name of authorized person if the representative is a legal person - The date, time (hour and minute) of order receipt, - Manner of order receipt (in person, by mail, by fax, by SMS) - Type of order (buy or sell), - Type and designation of security to which the order relates, - Number of shares or securities units subject to transaction, - Price at which the client gave the order, - Client's account number, - Period of validity of the order, - Date, time (hour and minute) of order's entry into the trading system of stock exchange, - Name of the stock exchange, - Date of drawing up broker's contract, - Serial number of trade on the stock exchange, - Quantity and price of securities according to dynamics of order execution - if the order is partially executed in multiple transactions - Total value, - Settlement date, - Date of sending certification on the receipt of an order, - Date of business calculation, - Information on order modification: the date and time, manner of modification,a number of a new order if the amount of securities or prices are modified, - Information on order cancellation: date, time and manner of cancellation, - Reference on type of orders: market order, limit order, the order with no additional or special conditions, order with additional conditions of presentation and execution, order with additional conditions of execution time, order with specific terms of execution. These information are entered in a manner that all transactions may be easily identified at any time, as well as a manner to easily monitor the transaction from the time of initial order entry until final execution of the transaction; 3. With respect to clearing and settlement 3.1. Daily records of the amounts paid to the client's account held by the authorized participant, specifying persons that paid those amounts and the date when they are paid to accounts, as well as daily records of withdrawals of funds from the client's account, the dates of these withdrawals and the names of the persons on whose behalf the withdrawal is made; 3.2. Daily records of client's cash account balance and daily balance with each individual client, stating the name of each client and the amount kept or received for that client on that day; 16

17 3.3. Daily records of all securities transfers executed from one client's account to another client's account. Article 39 Authorized participant who holds the securities for a third party in which or in respect of which the investment is made: 1) keeps secure or ensures secure storage of any document or document of title or documents evidencing ownership in this regard, and 2) provides that any securities purchased or held for the client is duly registered in its name or, in consultation with the client, in the name of the person authorized by that person to hold them on its behalf. Article 40 Record keeping obligations referred to in Article 38 of these Rules are continuous and require their respective update. Documentation referred to in paragraph 1 of this Article shall be kept within the prescribed period, and after expiration of the first two years, the authorized participant shall keep the documents in hard copy, on microfilm, CD-ROM or on other media suitable for storing data. Article 41 Information required to be kept in accordance with these Rules shall be kept in a manner that allows each transaction to be identified at any time and monitored from initial order to final execution. All data shall be stored, archived and labeled in a manner that allows instant access to any data. Article 42 Documentation, which authorized participant shall keep in accordance with these Rules and orders of the Commission shall be available by authorized participant for check or research to person authorized by the Commission. Article 43 Stock exchange may impose authorized participant, who is its member, an additional obligation which considers necessary in relation to: 1) keeping the accounts, books and records, or 2) the current checking of orders. 17

18 Article 44 When the auditor resigns or is dismissed by the authorized partcipant, notification on it shall be submitted to the Commission and shall include: 1) a statement signed by the auditor that there are no circumstances in connection with his resignation or dismissal which he considers to be brought before the Commission, or 2) a statement signed by the auditor regarding circumstances that led to his resignation or dismissal. Termination of operations Article 45 When authorized participant decides to terminate dealing in securities it shall: 1) notify the Commission and its clients on such a decision in advance; 2) provide, in a manner the Commission considers satisfactory, that any dealing in securities, is properly terminated or transferred to another authorized participant. Within the meaning of paragraph 1 of this Article it shall be considered that the authorized participant, which did not perform tasks it was issued the license for within the period of at least six months, permanently ceased to perform those tasks providing conditions for the Commission to issue decision on revocation of the license to that authorized participant, due to permanent cessation of operations with securities it was issued the license for. Voluntary liquidation of the authorized participant shall solely commence upon following the procedure referred to in paragraph 1 of this Article and the decision of the Securities and Exchange Commission on revoking the licence to the authorized participant. Margin trading Article 46 Within the meaning of these Rules, the following terms have the following meaning: (a) "margin" means the amount of cash that authorized participant borrows to the client for the purpose of financing the client and for margin trading; (b) "margin account" means accountmaintained by theauthorized participant, on which the money for execution of margin trading transactions is deposited; (c) "margin trading agreement" means the agreement entered into between the authorized participant and the client on margin account maintenance for the purpose of margin trading; (d) "maintenance margin" means the minimum amount of margin that has to be maintainedby the client on the margin trading account; (e) "margin trading" means purchase of securities by the authorized participant on behalf and for the account of the client through margin financing; 18

19 (f) "margincall" means the authorized participant s demand in writing to the client, requiring the clientto deposit additional moneyso that the margin account is brought up to the minimum maintenance margin; (g) "margin trading order" means the order by which the client authorizes the authorized participant to purchase securities on margin on its account and which contains the elements prescribed by these Rules. Article 47 Authorized participant shall offer its clients services of margin trading upon being licensed by the Securities and Exchange Commission to do so and its consent to business rules prescribing procedures and the rights and obligations of the authorized participant and the client when performing these tasks, the form of margin trading agreement and the form of an order for performance of these tasks. When deciding upon the request of the authorized participant to grant a license for margin trading, the Commission shall decide on granting its approval to authorized participant's business rules prescribing procedures and the rights and obligations of the authorized participant and the client when performing these tasks, a form of margin trading agreement and the form of an order for performance of these tasks. Authorized participant is required to submit to the Commission any changes and amendments of acts referred to in paragraphs 1 and 2 of this Article for approval. Changes and amendments to acts shall enter into force upon the approval of the Commission. Authorized participant shall not provide services of margin trading to the client or perform a task upon the client's order, which by its nature has characteristics of margin trading unless previously granted a license from the Commission to perform these tasks and approval to its acts in accordance with paragraph 1 of this Article. Authorized participant may offer to the client services of margin trading only if the margin is more than 50% of the realized purchase. Securities purchased on behalf of a client in respect of margin trading agreement are the property of that client and not of the authorized participant on whose account they were deposited as collateral, and are not included in the liquidation or bankruptcy estate of the authorized participant and may not be subject of execution of obligations of that authorized participant. Authorized participant shall, independently, through margin trading agreement, prescribe the conditions under which: a) the authorized participant is obliged to inform the client on margin call, requesting payment of additional funds to maintain the position on the margin, b) authorized participant is authorized to sell client's securities that serve as collateral, c) authorized participant is authorized to sell client's securities that serve as collateral, and without prior referral to a margin call to the client; 19

20 Mandatory elements of margin trading agreement Article 48 Before providing services of trading securities in a margin account the authorized participant is obliged to enter into margin trading agreement with the client that prescribes in particular, the following: 1) The amount of comissions and fees paid by the client as a result of margin trading; 2) The right of the client to pay the remaining amount owed at any time, 3) The right of authorized participant to trade securities purchased on margin on its own behalf if the client fails to comply with the requirements of the authorized participant; 4) the obligation of the client to carefully review the terms of margin trading offered by the authorized participant, 5) the obligations of the authorized participant to explain all the risks associated with margin trading, which are related to margin trading in general and margin trading of a certain security; 6) The method of communication between the authorized particpant and the client; 7) Procedures for resolving client and authorized participant's disputes; Any changes and amendments to margin trading agreement shall be drawn up in writing. Authorized participant is not authorized to change the terms in margin trading agreement or conditions specified in margin trading order, and in particular: the amount of maintenance margin, the amount of commission for these services and the amount of commission for maintaining the position that the client owes to authorized participant without the consent of the client and drawing up amendments to these acts. Reporting on risk obligation Article 49 In addition to obligations specified in the margin trading agreement, authorized participant shall familiarize the client verbally of all risks in accordance with paragraph 2 of this Article, and sign a special statement with the client wher client states that the broker has fulfilled its reporting obligations in accordance with this Article and familiarized the client about all relevant risks associated with the intended transaction. Authorized participant is obliged to inform the client in particular on: 1) client's risk to lose all money invested in trading in a margin account, 2) the risk of decline in prices of securities purchased on margin which as a result has the client's obligation to pay additional funds to authorized participant to avoid a forced sale of those securities; 3) therisk that authorized participantsell securities to cover the margin defficiency; 4) the right of authorized participant to sell securities purchased on margin if the client does not respond on the call for sale, 5) client's obligation to comply with a margin call, without the right to request the extension of term to act on the call for sale; 20