PowerPointPrsentation

1
SPECHTRechtsanwalt GmbH
Teinfaltstraße 8 A-1010 Vienna/Austria Tel. 4
3 1/219 68 69 Fax. [phone]
20 Email vienna_at_sboffice.at www.sboffice.at
2
Foreign Broker Foreign Securities
U.S. PerspectiveEuropean PerspectiveMoscow17
November 2007
SPECHTRechtsanwalt GmbHwww.sboffice.at
3
European Perspective
A Criminal Liability - Corrupt Practices
B Market Abuse in EUC Admission to Market
SPECHTRechtsanwalt GmbHwww.sboffice.at
4
European Perspective
A Criminal Liability - Corrupt Practices
SPECHTRechtsanwalt GmbHwww.sboffice.at
5
European Perspective Criminal Liability -
Corrupt Practices
International Framework

• Directive 2003/6/EC
• Council Framework Decision 2001/413/JHA
• OECD Convention on Combating Bribery of Foreign
  Public Officials in International Business
  Transactions

Austrian Implementation

• Austrian Act on Criminal Liability of Legal
  Entities

SPECHTRechtsanwalt GmbHwww.sboffice.at
6
European Perspective Criminal Liability -
Corrupt Practices
Austrian Act on Criminal Liability of Legal
Entities
Applicability

• decision makers or employees of a legal entity
  commit a criminal offence which brings an
  advantage to a legal entity or was committed in
  violation of the duties of an employee or in
  violation of duties of organs of corporate
  governance of a the legal entity.

SPECHTRechtsanwalt GmbHwww.sboffice.at
7
European Perspective Criminal Liability -
Corrupt Practices
Austrian Act on Criminal Liability of Legal
Entities

• legal entities, whether formed under of private
  and public law- limited liability
  companies- joint stock companies- savings
  banks- associations- funds- societas europea

Sanction Addressees
SPECHTRechtsanwalt GmbHwww.sboffice.at
8
a monetary fine in an amount of up to 1.8
million euros may be imposed directly against a
legal entity.
European Perspective Criminal Liability -
Corrupt Practices
Austrian Act on Criminal Liability of Legal
Entities
Sanction
SPECHTRechtsanwalt GmbHwww.sboffice.at
9
European Perspective Criminal Liability -
Corrupt Practices
Austrian Act on Criminal Liability of Legal
Entities

• criminal action occurs through one or more
  decision makers of the legal entity
• criminal action occurs through subordinate
  employees, who have been enabled through the
  failure of a decision maker to exercise their
  duties of care

Criminal liability imposed when
SPECHTRechtsanwalt GmbHwww.sboffice.at
10
European Perspective Criminal Liability -
Corrupt Practices
Austrian Act on Criminal Liability of Legal
Entities

Criminal liability requires

• advantage for the legal entity
• duties/obligations of the legal entity to be
  negelcted

Decision maker

• managing director
• member of supervisory board
• person with controlling influence on
  management
• other representative

SPECHTRechtsanwalt GmbHwww.sboffice.at
11
European Perspective Criminal Liability -
Corrupt Practices
Criminal Prosecution does not exclude Civil
Liability
Conditions of Civil Liability
- Damage- Causality- Culpable conduct- Neglect
of duties of members of corporate governance
SPECHTRechtsanwalt GmbHwww.sboffice.at
12
European Perspective Criminal Liability -
Corrupt Practices
Business Related Criminal Offenses

• false reporting (Joint Stock Company Act Sec
  255) - market abuse (Stock Exchange Act 48b,
  48c)- unfair competition practices (Austrian
  Competition Protection Act,)

- acceptance of benefits by public
officials- bribery- fraud- forgery (of
documents)- embezzlement - business espionage
SPECHTRechtsanwalt GmbHwww.sboffice.at
13
European Perspective
B Market Abuse in the EU
SPECHTRechtsanwalt GmbHwww.sboffice.at
14
European Perspective Market Abuse in the EU
EU Directive 2003/6/EC on Market AbuseEU
Directive 2003/124/EC (Implementation) EU
Directive 2003/125/EC (Implementation)
SPECHTRechtsanwalt GmbHwww.sboffice.at
15
European Perspective Market Abuse in the EU
- persons from using inside information he/she
possesses for his own or a third party's
account to acquire or dispose of financial
instruments to which that information relates
Member States shall prohibit
- any person to engage in market manipulation
SPECHTRechtsanwalt GmbHwww.sboffice.at
16
European Perspective Market Abuse in the EU
Inside Information
Characteristics

• precise in nature
• not made public
• relate to financial instruments
• admitted to market trade
• may influence the price if public

SPECHTRechtsanwalt GmbHwww.sboffice.at
17
European Perspective Market Abuse in the EU

• member to an administrative or managing body
• shareholder of the issuer
• employee or representative of the issuer
• engages in criminal activities to obtain inside
  information
• any person who possesses inside information and
  knows about its nature
• one who takes part in transaction decisions of
  legal entity

• Person

SPECHTRechtsanwalt GmbHwww.sboffice.at
18
European Perspective Market Abuse in the EU

• Market Manipulation

• transactions or orders to trade which give false
  or misleading signals or secure abnormal price or
  employ fictitious devices
• dissemination of information through the media
  giving false or misleading signals and knowing
  that information is false

SPECHTRechtsanwalt GmbHwww.sboffice.at
19
European Perspective Market Abuse in the EU

• Scope

• action carried out in the territory of Member
  State or abroad constituting insider trading or
  market manipulation concerning financial
  instruments admitted to trading on regulated
  markets in one Member State

• Exemptions

• journalists- accepted market practices

SPECHTRechtsanwalt GmbHwww.sboffice.at
20
European Perspective Market Abuse in the EU

• Transparency
• Requirements

• inside information to become public
• issuer must disclose inside information
• publication of list of persons with access to
  inside information
• notification to authorities of suspicious
  transactions
• notification to authorities of manager dealings

SPECHTRechtsanwalt GmbHwww.sboffice.at
21
European Perspective
C Admission to Market
SPECHTRechtsanwalt GmbHwww.sboffice.at
22
European PerspectiveAdmission to Market
Admission of Securities
Directive 2001/34/EC Admission to Official
Stock ExchangeDirective 2003/71/EC On the
Prospectus for SecuritiesDirective
2004/34/EC MiFIDDirective 2004/109/EC Transpa
rency RequirementsImplemented in Austrian
Stock Exchange Act
SPECHTRechtsanwalt GmbHwww.sboffice.at
23
European PerspectiveAdmission to Market
Investment Firm

• Any legal person who performs investment services
  on a professional basis (2004/39/EC MiFID)

• Company with seat and place of administration in
  Austria performing investment services(Austrian
  Securities Supervision Act)

SPECHTRechtsanwalt GmbHwww.sboffice.at
24
European PerspectiveAdmission to Market
Investment Services(MiFID)

• Reception and transmission of orders- execution
  of orders on behalf of clients- dealing on own
  account- portfolio management- investment
  advice- operation of MTF- underwriting/placing
  of financial instruments

SPECHTRechtsanwalt GmbHwww.sboffice.at
25
European PerspectiveAdmission to Market

• safekeeping/administration of financial
  instruments for account of clients- granting
  loans to allow to carry out transactions- advice
  on capital structure foreign exchange
  services- investment research and
  analysis- services related to underwriting

Ancilliary Services(MiFID)
SPECHTRechtsanwalt GmbHwww.sboffice.at
26
European PerspectiveAdmission to Market

• transferable securities- money-market
  instruments- options, futures, swaps- other
  derivatives relating to securities/commodities-
  derivative instruments for the transfer of risk

Financial Instruments(MiFID)
SPECHTRechtsanwalt GmbHwww.sboffice.at
27
European PerspectiveAdmission to Market
Austrian Operating Requirements
At least one of the following- license from
FMA- licence from Member State (Single
Passport)- banking institution
SPECHTRechtsanwalt GmbHwww.sboffice.at
28
European PerspectiveAdmission to Market
Investment Firms have to be Capital Companies
which

• adhere to capital requirements - do not hold
  clients money or securities- adhere to
  organisational requirements (shareholders,
  directors)

SPECHTRechtsanwalt GmbHwww.sboffice.at
29
European PerspectiveAdmission to Market
Operating Requirements of Investment Firms

• utilize Best Execution Policy- define type of
  client- provide reporting specific to type of
  client- operate with Internal Controlling
  Department- separate Compliance / Execution /
  Controlling functions

SPECHTRechtsanwalt GmbHwww.sboffice.at
30
European PerspectiveAdmission to Market
Admission of Securities

• adhere to legislation of state of
  domicile- has market capitalization 1 Mio
  published annual accounts 3 years preceding
  application

Requirements on Issuer
SPECHTRechtsanwalt GmbHwww.sboffice.at
31
European PerspectiveAdmission to Market
Admission of Securities

• freely negotiable- distribution of sufficient
  number- division of securities must meet market
  requirements

Requirements on Securities
If not listed in state of domicile, reason for
not being listed must not be to protect investors
Non EU Issuer
SPECHTRechtsanwalt GmbHwww.sboffice.at
32
European PerspectiveAdmission to Market
Admission of Securities

• signature of issuer and member of stock
  exchange- details about issuer and
  securities- approved prospectus

Contents of Application
SPECHTRechtsanwalt GmbHwww.sboffice.at
33
European PerspectiveAdmission to Market
Admission of Securities

• no requirements regarding form- specified data
  on issuer- specified data on securities- profit/
  loss assessment- Summary - risk assessment

Prospectus
Single Passport PolicyNon EU admitted if
equivalent requirements exist in countries where
originally published
SPECHTRechtsanwalt GmbHwww.sboffice.at
34
European PerspectiveAdmission to Market
Admission of Securities

• Issuer - Management Body- Supervisory
  Body- Guarantor- Management Company (if
  any)- Scope Place of addressed Public

Persons legally responsible for content of
prospectus
SPECHTRechtsanwalt GmbHwww.sboffice.at
35
SPECHTRechtsanwalt GmbH
Vienna Teinfaltstraße 8 A-1010
Vienna/Austria Tel. [phone] Fax. 43
1 219 68 69 20 Email vienna_at_sboffice.at www.sboff
ice.at
Moscow Bolshoy Afanasyevsky per, 41A 119019
Moscow Tel. [phone] Fax [phone]
34 Email moscow_at_sboffice.co.ru www.sboffice.at
SPECHTRechtsanwalt GmbHwww.sboffice.at