Disputes related to securities
Other legally established requirements for the creation, modification, loss of rights to securities, their turnover, etc. are given in paragraph 2 of Chapter 3 of the Civil Code (Objects of civil rights).
Since shares are also securities, disputes over their turnover must be resolved in accordance with Section III (Joint Stock Company), paragraph 2, Chapter 2 of the Civil Code (Subjects of Civil Rights).
More precise and detailed requirements are given in the Law of the Republic of Kazakhstan "On Joint Stock Companies" dated May 13, 2003 No. 145.
Chapter 4 of this Law establishes general provisions on shares and other securities of the company.
The uniform application of legislation on joint-stock companies is the subject of the Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan "On the application of Legislation on Joint-Stock Companies". The issues of acquisition, sale of shares, and receipt of dividends on them are resolved in paragraphs 6, 8-11 of this resolution.
The main regulatory act on this issue is the Law of the Republic of Kazakhstan "On the Securities Market" dated July 2, 2003. No. 461, which regulates public relations arising in the process of issuance, placement, circulation and repayment of equity securities and other financial instruments, the specifics of the creation and operation of securities market entities, defines the procedure for regulation, control and supervision of the securities market in order to ensure the safe, open and effective functioning of the securities market, protection of the rights of investors and holders of securities, fair competition of securities market participants.
In addition to these regulations, there are a significant number of acts of the authorized body on the issue of securities circulation – resolutions of the Board of the National Bank of the Republic of Kazakhstan regulating various issues related to securities, their movement, registration, training of personnel to work with them and organization of activities in this area of second-tier banks.
Plaintiffs B.Atabaev, K.Seilkhanova, and A.Isenov filed independent lawsuits with the district court of Zhanaozen, Mangystau region, against defendants G.Yusupova and L.Yusupova to recover the value of the shares sold by the issuer of JSC "Ozenmunaigas". By court decisions of January 29, 2014, the plaintiffs' claims were satisfied and the amounts of the shares sold in 2011 but not paid by the buyers were recovered in their favor.
Plaintiff A.Zhubangosov filed a lawsuit against JSC "SNPSAktobemunaygas" to claim shares for the time worked in JSC. By the decision of the Aktobe City Court of March 20, 2014, the claim was dismissed due to the plaintiff's omission of the limitation period.
By the decision of the specialized interdistrict Economic Court of Almaty dated December 4, 2014. The claim of the liquidation commission of Currency-Tanzit Bank JSC against Nurbank JSC for the recovery of dividends on securities in the amount of 228,963.86 tenge was denied, since the shares named by the plaintiff were transferred to MoneyExperts LLP on August 24, 2012 through an exchange sale and the dividends were paid to the new owner.
Securities occupy a significant place among the instruments of the stock market. All over the world, Governments and their institutions are the largest borrowers of capital. It is through the government securities market that the state borrows temporarily available funds from commercial banks, financial companies and the public, and the monetary resources obtained in this way are used to finance non-inflationary deficits in the national and local budgets. In addition, this sector of the stock market is particularly important for the country's economy as an instrument of monetary policy, as a key indicator of the state of the state's financial system, as well as a guideline for foreign investors.
Based on the general concept of securities, it is necessary to indicate their particular characteristics.
Securities can be debt and equity.
Debt securities are securities certifying the obligation of the issuer (debtor) to pay the principal amount of the debt on the terms of the issue of these securities.
Equity security is a security certifying the right of its owner to a certain share in property in cases stipulated by the legislation of the Republic of Kazakhstan.
Securities include shares, bonds and other types of securities defined in accordance with this Code and other legislative acts of the Republic of Kazakhstan.
Securities in the form of issue may be:
1) documentary and non-documentary;
2) emission and non-emission;
3) personal, bearer and warrant cards
Documentary securities are issued in documentary form on paper or other tangible media with the ability to directly read the contents of the security without using special technical means.
Non-documentary securities are issued in an undocumented form in the form of a set of electronic records.
Equity securities are securities having homogeneous characteristics and details within the same issue, placed and traded on the basis of the conditions that are uniform for this issue.
Non-equity securities are securities that do not meet the above criteria.
A registered security is a security confirming the ownership of the rights certified by it to the person named in it.
A bearer security confirms that the rights certified by it belong to the bearer of the security.
An order security is a security confirming that the rights certified by it belong to a person named in it, and in the case of transfer of these rights to them in accordance with the procedure provided for in paragraph 3 of Article 132 of this Code, to another person.
Thus, it should be indicated that a security is a monetary document attesting to the ownership of its owner for a certain amount of money or specific property values.
There are many types of securities on the global financial market, differing in the rights and obligations of the investor (buyer) and the issuer (the person who issued the Central Bank).
The general assessment of the importance of securities in the economy is characterized by the following: securities act as a flexible instrument for investing available funds of legal entities and individuals; placement of securities is an effective way to mobilize resources for the development of production and meeting other public needs; securities are actively involved in servicing commodity and monetary circulation; in the securities market, primarily stock exchanges, stock prices are calculated.
Securities exchange rates are a barometer of any changes in the economic and political life of a country.
Exchange rates fall sharply during years of crises and unfavorable economic conditions, and, conversely, rise during periods of recovery and recovery in production.
An important point in resolving securities disputes is the confirmation of the rights to the security.
Separate sections should be highlighted here.
Confirmation of the right to a documentary security is the security itself, in the case of its transfer for safekeeping to a professional participant in the securities market authorized for such storage in accordance with the license issued to him or in accordance with the legislative acts of the Republic of Kazakhstan, confirmation of the right to this security is an extract from the account opened by this professional participant for the purpose of its accounting. If there is a discrepancy between the documentary security and the statement from the specified account, the statement takes precedence.
Confirmation of the right to a non-documentary security is an extract from an account opened for the purpose of accounting with a professional securities market participant who is authorized to register transactions with securities in accordance with a license issued to him or in accordance with the legislative acts of the Republic of Kazakhstan.
Currently, securities registration is carried out by JSC "Unified Registrar of Securities".
An important requirement for securities when they are traded on the market is the form of the security, while the types of rights that are certified by this security, the mandatory details of the security, the requirements for its form and other necessary requirements are determined by legislative acts or in accordance with the procedure established by them.
When resolving disputes, it should be borne in mind that the absence of mandatory details of a security or the non-compliance of a security with the form prescribed for it entails its invalidity.
The movement of securities on the market is carried out by transferring the rights to a security.
To transfer the rights certified by a bearer security to another person, it is sufficient to hand over the security to this person.
The rights certified by a registered security are transferred in accordance with the procedure established for assignment of a claim (assignment), taking into account the specifics provided for by the legislation of the Republic of Kazakhstan on the securities market.
The rights under an order security are transferred by making a transfer inscription - an endorsement on this paper. The person transferring the rights under the warrant security (the endorser) is responsible not only for the existence of the right, but also for its implementation, in accordance with the established legislation of the Republic of Kazakhstan on mortgage of immovable property.
An endorsement made on a security transfers all rights certified by the security to the person to whom or by whose order the rights under the security are transferred (the endorser). The endorsement may be blank (without specifying the person to whom the execution is to be performed).
An endorsement may be limited only by an order to exercise the rights certified by a security, without transferring these rights to an endorser (a proxy endorsement). In this case, the endorser acts as a representative.
The most common security in the Republic of Kazakhstan is a share, i.e. a security issued by a joint-stock company and certifying the rights to participate in the management of the joint-stock company, receive a dividend on it and part of the property of the joint-stock company upon its liquidation, as well as other rights provided for by legislative acts of the Republic of Kazakhstan, shares are issued only as registered equity securities.
Legislative acts of the Republic of Kazakhstan may provide for the possibility of repurchasing shares by court order from a shareholder who violates the interests of the joint-stock company by his actions or omissions.
Shares can be common or preferred.
A common share grants a shareholder the right to participate in the general meeting of shareholders with the right to vote on all issues put to the vote, the right to receive dividends if the company has net income, as well as a portion of the company's property upon its liquidation in accordance with the procedure established by the legislation of the Republic of Kazakhstan.
A preferred share grants a shareholder a pre-emptive right over the shareholders owning ordinary shares to receive dividends in a predetermined guaranteed amount established by the company's charter and to a portion of the company's property upon liquidation in accordance with the procedure established by this Law of the Republic of Kazakhstan "On Joint Stock Companies".
Bonds are quite common - securities with a maturity set in advance at the time of their issue, certifying, in accordance with the terms of the issue, the right to receive remuneration from the person who issued the bond and, at the end of its circulation period, the nominal value of the bond in money or other property equivalent.
The bonds are issued only as registered equity securities, and the Government of the Republic of Kazakhstan, the National Bank of the Republic of Kazakhstan, and commercial organizations have the right to issue them.
Individuals purchase bank certificates of deposit, which are registered non-equity securities, certifying the rights of its holder to receive its nominal value upon expiration of the circulation period established for it by the terms of issue or before its expiration, as well as remuneration in the amount established by the terms of issue.
Since the Kazakh government securities market, despite the existing difficulties, is gradually developing and taking on a civilized appearance, thanks to a clear legislative framework, the introduction of information technologies, and the presence of a strict regulator represented by the National Bank of the Republic of Kazakhstan and the relevant committee.
Attention!
The Law and Law Law Firm draws your attention to the fact that this document is basic and does not always meet the requirements of a specific situation. Our lawyers are ready to assist you in drafting any legal document that suits your situation.
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