REPUBLIC OF LITHUANIA LAW ON PUBLIC TRADING IN SECURITIES Chapter I GENERAL PROVISIONS Article 1. Objective of the Law The objective of this Law is to provide legal basis for safe, open and efficient

this Law. Annual financial accounts must be submitted alongside with the findings of an independent auditor concerning the compliance of the accounting and financial accounts with the laws of the Republic of Lithuania and general accounting principles.

1. Regular reports may be made each quarter or every six months. The regularity of the preparations of these reports shall be established by the Securities Commission according to the rules approved in advance, depending on the issuer and the volume of turnover of the securities issued by it. The regular reports must disclose the data on the financial condition of the issuer and information about the material events which occurred during the accounting period.
2. The Board of the accountable issuer must disclose to the general meeting which approves annual reports the data on all shareholders which, to its knowledge, have by the right of ownership or hold more than 5 % of all votes. This information must state the full names of shareholders (names of enterprises), the number of shares held by each of them and the percentage of votes. The data must be submitted and announced as annexes to the annual prospectuses-reports.
3. The accountable issuer must provide each owner of securities issued by it with the opportunity to familiarise himself with all the reports specified in this Article free of charge whereas if the owner files a written request, provide him with copies of these reports for a fee set in the Statutes.
4. The accountable issuer must submit reports specified in par. 1 hereof to the stock exchange on which its securities are listed within the same time period as for the Securities Commission. Article
5. Disclosure of Information Concerning Material Events
6. The accountable issuer must no later than within 5 working days present to at least one national daily paper, the Securities Commission and the Stock Exchange an information report signed by its manager about every material event with the exception of events specified in par. 3 hereof. The information report must state the type and short description of the event. The title of the national daily paper in which information about stock events will be announced must be specified in the issuer's Statutes and the prospectus.
7. If, in the opinion of the accountable issuer, the issuer may incur financial or competition-related losses by reason of the disclosure of information referred to in par. 1 hereof, the accountable issuer may refrain from publishing the information report provided for by par. 1 hereof submitting it only to the Securities Commission with a marking "confidential information" and a written explanation of the reasons precluding the disclosure of information.
8. Upon submitting the report according to the requirements referred to in par. 2 hereof, the accountable issuer must specify therein the date until which the information must remain confidential. On the day the confidentiality of the information expires it must be disclosed in the manner set out in par. 1 hereof.
9. Natural and legal persons who are aware of the information which has not been disclosed to the public, shall have no right to enter into transactions relative to securities until this information is disclosed following the requirements set forth in par. 1 hereof.
10. Prior to each material event the issuer must compile a list of persons which alongside with the executives of the issuer shall have the right to get to know such information prior to its public disclosure. It shall be assumed that the executives of the issuer always know information concerning material events. Persons, who by reason of the positions occupied by them or for some other lawful reasons are aware of the information concerning the stock event, shall be prohibited from informing other persons thereof until its public disclosure.
11. The persons who have concluded transactions with securities by making use of the information about material events not subject to disclosure shall be held liable under laws. Article
12. Primary Public Trading in Securities
13. Primary public trading in securities may be carried out when the issuer offers securities on its own account or under the securities offering contracts entered into with the intermediaries of the public trading in securities.
14. The following rules must be observed during primary public trading in securities: 1) it shall be prohibited to advertise securities and to announce subscription for them if they are not registered with the Securities Commission. The issuer or the intermediary of public trading in securities acting on its behalf shall have the right to carry out market research prior to the registration of securities, creating conditions for the potential investors to familiarise themselves with the draft prospectus presented to the Securities Commission; 2) each potential investor must be provided with the opportunity to familiarise itself with the prospectus and other documents on the basis of which the issuer's securities have been registered; 3) only information contained in the prospectus, annual prospectus-statement or regular reports may be used in advertising offered securities; 4) every advertisement must state where and when it is possible to familiarise oneself with the prospectus and accounts of the issuer; 5) everyone who is acquiring securities must be guaranteed equal terms and conditions of acquisition.
15. If during the primary public trading the data provided in the prospectus changes or a material event occurs , the issuer must give notice thereof in the manner prescribed by Article 6 of this Law. In such cases the persons who have already subscribed for the securities of the issuer shall have the right to renounce them within 5 days from the disclosure of new information, whereas the issuer must within 10 days return the contributions paid by them without making any deductions.
16. If the issuer or the intermediary of public trading in securities who acts on its behalf does not comply with the rules of primary public trading in securities provided for in this Article, or if it turns out that incomplete or incorrect data have been presented for the registration of securities, the Securities Commission shall have the right to suspend the registration of the issuer's securities and to set the time limit for the elimination of the violations. If the violations are not eliminated within the set period, the Securities Commission shall cancel the registration of securities. It shall be prohibited to offer securities if the Securities Commission suspends or cancels their registration. Article
17. Secondary Public Trading in Securities
18. Secondary public trading in securities shall be carried out only through intermediaries of public trading in securities.
19. Secondary public trading in securities must be carried out on the Stock Exchange if: 1) the authorised capital of the issuer whose securities are listed is not less than 1 million litas; 2) the securities are on the Official List of the Stock Exchange compiled in accordance with the procedure established in Chapter 5 of this Law.
20. The provisions of par. 2 shall not apply if other laws prescribe a different procedure for trading in securities.
21. The transactions of the secondary trading, i.e. purchase or/and sale (including exchange) in the securities of the accountable issuer must be concluded, through intermediaries of public trading in securities, by: 1) investment companies; 2) insurance companies; 3) institutions engaged in the individuals' pension insurance; 4) commercial banks; 5) other legal persons while purchasing or selling a block of shares.
22. The rules of the secondary public trading outside the boundaries of the Stock Exchange shall be established by the Securities Commission.
23. Persons who according to this Law in the course of secondary offering register outside the Stock Exchange a transaction regarding the issuer's securities listed on the Stock Exchange must, in the cases, according to the procedure and at the date prescribed by the Securities Commission, specify the number of securities transferred by the transaction and the unit price. Chapter III ACQUISITION OF A BLOCK OF SECURITIES Article
24. Information Concerning the Acquisition of a Block of Shares
25. A natural or legal person who, acting independently or together with other persons, acquires shares of an accountable issuer registered in the Republic of Lithuania which award him in excess of 1/10, 1/5, 1/3, 1/2, or 2/3 of votes must, within 15 days from the moment the relevant limit is exceeded, inform the Securities Commission and the issuer about the total number of its shares belonging to him. The provisions shall also apply in cases where the specified limits are exceeded in the diminishing order.
26. Persons to whom the information disclosure requirements set out in par. 1 hereof are applicable must also at the same time furnish data on the securities held by them, entitling them to vote in future and (or) hold securities of the issuer.
27. The procedure for informing the public about the acquisition of the block of securities shall be decided on by the Securities Commission.
28. As used in this Law, such persons shall be considered as acting in concert who have agreed in writing to pursue common policy with regard to the issuer when disposing of property and non-property rights attaching to the shares. It shall be deemed that such an agreement always exists without written confirmation between: 1) the executives of the issuer, with the exception of persons who are not members of the managing bodies of the issuer; 2) the issuer and the subjects controlled by it; 3) the subjects which are controlled by the same persons; 4) spouses, parents and their children, brothers and sisters.
29. Persons acting in concert shall be jointly and severally liable for the fulfilment of obligations established in this Law and subordinate legislation.
30. A person who fails to inform the issuer or the Securities Commission about exceeding the limits specified in par. 1 hereof shall, for two years from the moment the correct data is announced, loose at all general meetings of shareholders held during that period all votes attaching to the shares which he has acquired in excess of the limit subject to declaration. Moreover, all decisions adopted in the period between the acquisition of a block of shares and the moment of disclosure of correct information may be annulled in court in the event that the issuer's managing bodies have been changed or property or non-property rights of shareholders have been violated by the decisions. Article
31. Tender Offer
32. Persons who intend to acquire a block of securities of the issuer may do so by means of a tender offer. Tender offer means the procedure for stating that a natural or legal person is willing to acquire a part or all securities of the issuer. Tender offers shall be executed through the stock exchange.
33. Tender offers to acquire the shares of the accountable issuer may be mandatory and voluntary. If a person, acting independently or in concert with other persons, acquires more than 50 percent of votes at the general meeting of shareholders of the issuer who has issued securities into public trading, he must submit a tender offer to buy up the remaining shares of the issuer at the price stated in the offer. This price shall be registered with the Securities Commission and it must not be less than the weighted average of prices of the shares the offeror acquired over a year before exceeding the 50 percent limit.
34. Tender offers shall be registered and the rules for their submission and execution shall be established by the Securities Commission. Chapter IV INTERMEDIARIES OF PUBLIC TRADING IN SECURITIES Article
35. Prohibition to Engage in Intermediary Activity in Public Trading in Securities or in Consulting on Matters of Direct Investment without a Due Licence
36. Only enterprises which have a licence issued by the Securities Commission and commercial banks which have been issued the licence by the Bank of Lithuania shall have the right to engage in intermediary activities in public trading in securities or to consult third parties on matters of direct investment in securities. As used in this Law the following activities performed for a fee shall be considered as consulting on matters of direct investment in securities : 1) consulting of other persons in assessing the value of securities; 2) advice on issues of investment in securities, their purchase or selling; 3) announcement and publishing of studies providing specific recommendations on matters of investment in securities; 4) management of investment portfolio of other natural or legal persons.
37. The licence for consulting third parties referred to in par. 1 of this Article shall not be required: 1) for the State; 2) the Bank of Lithuania; 3) governmental services and agencies established following the decision of the Government of the Republic of Lithuania for the purpose of promotion of domestic or foreign investments; 4) mass media and owners and employees thereof who announce through the media financial and business news for an indefinite circle of persons and who do not use in the news the data about the investment portfolio of a specific person.
38. One person may be the owner (shareholder) or employee of only one brokerage firm or of investment management and consulting firm. If a person becomes the owner or shareholder of several enterprises of such type as a result of the reorganisation or for some other reasons, he must immediately inform the Securities Commission thereof and take measures to rectify the situation. Until the situation is rectified, such person may not participate in the management and activities of more than one enterprise.
39. Commercial banks shall have the right to engage in the activities specified in par. 1 hereof: set up specialised internal structural divisions or establish brokerage firms or investment management and consulting firms as subsidiaries of the banks. All the regulations and requirements prescribed by this Law and other legal acts for other intermediaries of public trading in securities shall apply to the operations in securities carried out by commercial banks and to the supervision of said operations. Article 12 Brokerage Firms
40. An enterprise of any type determined by the Law on Enterprises of the Republic of Lithuania which has obtained, in the manner prescribed by Article 16 of this Law, a licence to engage in intermediary activities in the sector of public trading in securities may be a brokerage firm. A brokerage firm may issue only registered shares.
41. Brokerage firms may engage in the following activities: 1) act as intermediaries in public trading in securities, being members of one or several stock exchanges or in any other manner not prohibited by laws; 2) buy or sell securities in their own name or on behalf of their clients and with their own or their clients' funds in compliance with the provisions set forth in Article 13 of this Law; 3) provide direct consultations to investors on the issues concerning prices of securities, investment in securities as well as their buying or selling; 4) manage their clients' investment portfolios and funds allocated for operations in securities; 5) hold the securities of their clients in safekeeping; 6) consult the issuers on the matters concerning the issue of securities and on attracting investments, 7) under an agreement with the issuer, arrange and carry out the issue of its securities; 8) conduct the accounting of the securities of issuers and investors; 9) in accordance with the regulations approved by the Securities Commission, loan securities to the clients as well as their own funds for the acquisition of securities.
42. Brokerage firms shall be prohibited from engaging in other activities not specified in this Article.
43. Brokerage firms shall have the right to establish subsidiaries only for carrying out or servicing the activities provided for in items 3 through 8 of par. 2 hereof. Brokerage firms shall be prohibited from establishing subsidiaries for carrying out activities not specified in this part. Article
44. Duties of the Brokerage Firms
45. Brokerage firms must conduct separate accounting of their own securities and the securities and cash funds of their clients.
46. All contracts between brokerage firms and their clients must be executed in writing in compliance with the rules approved by the Securities Commission.
47. If a brokerage firm cannot execute all orders of their clients, it must first of all execute orders to sell at the lowest price and orders to buy at the highest price. If several clients offer the same price, priority shall be given to the orders which have been sent first unless the trading rules of the stock exchange to which the order is sent provide otherwise.
48. A brokerage firm may carry out security transactions on its own account only after the execution of the orders of all its clients to perform this operation or if it offers better terms than the client : higher price when there is an order to buy , or lower price when there is an order to sell them.
49. A brokerage firm shall be prohibited from giving knowingly misleading recommendations and information to its clients.
50. Brokerage firms must comply with the capital adequacy requirements approved by the Securities Commission as well as keep accounting and other documents according to the rules approved by the Commission, present to their clients documents certifying securities transactions, statements of accounts, and reports on their financial position, keep the securities of their clients, prepare annual and periodical reports on their activities and financial position.
51. In buying or selling securities, consulting on the issues of their trading as well as in providing portfolio management services, a brokerage firm shall be represented by a broker who has passed qualifications exams organised by the Securities Commission or who has some other qualifications certificate recognised by the Commission. The Securities Commission may determine other operations for the performance whereof it is necessary to have a document certifying professional qualifications.
52. A brokerage firm must keep confidential information of its clients secret. The firm must approve regulations for keeping confidential information secret, which shall apply to its brokers, members of managing bodies and other employees. Article
53. Investment Management and Consulting Firms
54. An enterprise of any type specified in the Law on Enterprises of the Republic of Lithuania which has been issued, in accordance with the procedure established in Article 16 of this Law, a licence to consult third parties on investment matters may be an investment management and consulting firm. Investment management and consulting firms may issue only registered shares.
55. Investment management and consulting firms may be engaged in activities specified in items 1 through

par. 1 of Article 11 of this Law.

1. Investment management and consulting firms shall be prohibited from participating in the activities of other enterprises, having a share in their capital, investing in securities. Article
2. Duties of Investment Management and Consulting Firms
3. Management contracts under which an investment management and consulting firm is authorised to manage an investment portfolio must be executed in writing in compliance with the rules set by the Securities Commission. A copy of such contract must be presented to the brokerage firm in which securities referred to in the contract are deposited. If a brokerage firm accepts orders from an investment management and consulting firm which are not in compliance with management contract, both firms shall be jointly liable for the consequences.
4. Investment management and consulting firms must keep the accounting and other documents in compliance with the rules approved by the Securities Commission, present to their clients documents certifying transactions with securities, statements of accounts, reports on their financial position, prepare annual and periodic reports on their activities and financial position.
5. In giving professional consultations or managing portfolios of their clients, an investment management and consulting firm shall be represented by a broker who has passed qualifications exams organised by the Securities Commission or who has some other qualifications certificate recognised by the Commission.
6. Investment management and consulting firms must keep confidential information of their clients secret. The same requirement shall apply to brokers, members of managing bodies and other employees of investment management and consulting firms. Article
7. Licencing of Intermediaries of Public Trading in Securities
8. An enterprise may start the activities of the brokerage firm or investment and consulting firm only upon obtaining a licence issued by the Securities Commission. Brokerage firms and investment management and consulting firms may reorganise themselves only with the prior consent of the Securities Commission. The Securities Commission shall have the right to refuse giving its consent to the reorganisation of the firm if: 1) after the reorganisation, the firm would not meet the capital adequacy requirements prescribed by this Law and the rules approved by the Securities Commission; 2) reorganisation threatens the security of the clients' money and securities entrusted to the firm.
9. The decision of the Securities Commission to refuse giving its consent to the reorganisation of a brokerage firm or an investment management and consulting firm may be appealed to court.
10. The applicant for the licence of a brokerage firm or an investment management and consulting firm shall file with the Securities Commission an application containing the following information: 1) the name of the firm and the address of its registered office; 2) full names of the owners (shareholders), their addresses, share of capital and votes, and information concerning their participation in the activities and capital of other enterprises; 3) the activities for which they wish to obtain a licence; 4) full names of persons responsible for the organisation and management of activities referred to in the licence, their addresses, professional qualifications, employment history over the last five years; 5) the amount of its own and borrowed capital which is planned to be used for the organisation of the activities referred to in the licence, as well as the sources of borrowing; 6) data on the previous activities of the firm and reasons for which these activities have been terminated; 7) the list of persons who have the right to conclude transactions with securities on behalf of the firm under Article 17 of this Law; 8) information on the unserved sentence of all persons, referred to in the application, for crimes against property , business conduct and finances.
11. A business plan describing how the firm is going to organise and carry out its activities as well as revealing other data on the firm as prescribed by the rules of the Securities Commission must be attached to application for obtaining the licence of a brokerage firm or an investment management and consulting firm.
12. The Securities Commission shall have the right to establish requirements for the minimum amount of own capital and the maximum amount of borrowings provided for by item 5 of par. 3 hereof, as well as for premises and telecommunications equipment.
13. The Securities Commission may issue special licences for brokerage firms, entitling them to carry out only a part of functions specified in Article 12 of this Law, as well as refuse granting them the right to accept money for acquiring securities, to open cash accounts for the clients and to trade on their own account. Special licences may be issued if a firm does not qualify for one or several types of activities specified in Article 12 of this Law or at the request of the firm itself.
14. The Securities Commission may refuse to issue the licence if: 1) the application does not meet the requirements set forth in par. 3 hereof or the data provided in it are incomplete or not true; 2) own funds available to the applicant are less than the minimum amount established by the Securities Commission or borrowed funds exceed the maximum prescribed by the Commission; 3) owners of the applicant or persons who directly run it have a bad reputation (there is evidence of cases of dishonesty or violations of financial discipline, or penalties have been imposed for the abuse of their official position, or administrative penalties have been imposed for the violation of legal acts regulating securities market, or they have been penalised for fraudulent bankruptcy); 4) at least one of the owners (shareholders) of the applicant is an employee of the stock exchange; 5) at least one of the owners (shareholders) or managing body members of the applicant, or the head of its administration or its chief financier have not served out the sentence for crimes against property, business conduct or finances; 6) the applicant, at least of one of its owners (shareholders), a member of its managing body, the head of the administration, a broker, or the chief financier has committed gross violation of the Ethics Code of the Intermediaries of Public Trading in Securities.
15. Managers of a firm must notify in advance the Securities Commission about the changes in the composition of the owners (shareholders) of the brokerage firm or investment management and consulting firm.
16. The Securities Commission must inform the applicant about the consent or refusal to issue the licence within 3 months from the filing of all documents and data. The Securities Commission shall have the right to request that the applicant present additional data or explanations. In this case the time limit for the consideration of application shall be calculated from the date the last data or documents have been filed. Refusal to issue the licence must be justified in writing and may be appealed in court.
17. Commercial banks shall acquire the right to carry out operations in securities in accordance with the licence issued by the Bank of Lithuania. When issuing the licence to a commercial bank, the Bank of Lithuania shall restrict operations in securities if the commercial bank fails to present the Securities Commission's conclusion concerning the preparedness of the commercial bank to engage in such activities. Article
18. Brokers
19. A natural person who is licenced by the Securities Commission may be a broker. The Securities Commission may issue a general licence entitling a person to perform all brokerage operations or a special licence entitling him to perform one or several specified brokerage operations.
20. A person who applies for a broker's licence must pass the examinations organised by the Securities Commission or present to the Commission a qualifications certificate recognised by it. The Securities Commission shall have the right to set education or professional requirements for brokers.
21. The Securities Commission shall have the right to conduct from time to time but no more frequently than once a year the brokers' qualifications re-evaluation. A broker's qualifications may be re-evaluated on the basis of the clients' justified complaints, as well as reports, findings and other documents of institutions empowered by this Law to check the activities of the intermediaries of public trading in securities, which evidence the broker's inadequate qualifications. According to the qualifications re- evaluation results the number of functions to the performance whereof the broker is entitled may be reduced and if it is established that the broker has entirely lost his qualifications, his licence shall be revoked. Article
22. Suspension and Revocation of the Licence
23. The Securities Commission shall have the right to revoke the licence issued to a brokerage firm, investment management and consulting firm or a broker if the holder of the licence: 1) applies in writing for the revocation of its licence; 2) fails to commence licenced activities within 12 months or stops such activities for more than 12 months; 3) has obtained the licence by presenting false information or by other illegal means; 4) no longer meets the requirements on the basis whereof the licence has been issued; 5) does not meet capital adequacy requirements, and is unable to fulfil its obligations to the creditors and particularly if this poses a threat to the security of the property entrusted to it/him; 6) grossly violates the Ethics Code of the Intermediaries of the Public Trading in Securities; 7) has concealed information about conviction for the acts referred to in item 5 of par. 7 of Article 16; 8) does not comply with this Law and the rules and decisions approved by the Securities Commission.
24. The revocation of the licence shall become effective from the moment such decision is passed, irrespective of whether or not it is disputable.
25. The Securities Commission may suspend the licence if the brokerage firm or investment management and consulting firm, its broker or any other employee violates this Law or other legal acts regulating trading in securities. The licence shall be suspended for no longer than 3 months during which the Securities Commission shall decide whether to renew or revoke the licence. The accounts of such firm may be frozen during the suspension of the licence.
26. Before passing a decision to revoke or suspend the licence, the Securities Commission must inform the firm or its broker regarding whom such decision may be passed and provide them with an opportunity to give explanations.
27. Upon suspension or revocation of licence, the broker shall loose the right to continue his professional activities. The suspension or revocation of the broker's licence shall cause the suspension or revocation of the licence of the brokerage firm or investment management and consulting firm wherein said broker is employed only if the firm no longer qualifies for the licence that it has been issued.
28. The Securities Commission shall have the right to appoint the Administrator for the period of suspension of the licence of the brokerage firm or investment management and consulting firm, for the supervision of the firm's activities. After the appointment of the Administrator, managers and brokers of the firm must obtain his approval for all the decisions relative to the activities of the firm. Other rights and duties of the Administrator shall be established by the Securities Commission.
29. Upon the revocation of the licence, the brokerage firm or investment management and consulting firm shall be liquidated or reorganised in accordance with the laws regulating the liquidation or reorganisation of the relevant type of enterprises and the rules approved by the Securities Commission concerning the management of securities and money accounts in the event of the revocation of the licence. The Securities Commission shall notify the appropriate Registrar responsible for the maintenance of the register of enterprises about the revocation of the licence and shall announce this information in "Valstybës þinios" (Official Gazette).
30. The reasons specified in par. 1 hereof shall be grounds for the Bank of Lithuania to apply enforcement measures to commercial banks. The enforcement measures shall be applied on the initiative of the Bank of Lithuania or the Securities Commission. The enforcement measures applied because of the reasons stated in par. 1 hereof may be lifted only with the consent of the Securities Commission. When applying enforcement measures the Bank of Lithuania must follow the procedures provided for in par. 4 hereof. Article
31. Association of the Intermediaries of Public Trading in Securities
32. Brokerage firms and investment management and consulting firms may form associations of the intermediaries of public trading in securities.
33. The main objectives of the Association, as self- regulating institution, must be as follows: 1) to express the attitude of the intermediaries of public trading in securities belonging to the association to the problems of the functioning of securities market; 2) to prepare the Ethics Code of the intermediaries of public trading in securities belonging to the association and to supervise compliance with the Code; 3) to apply sanctions provided for in the Statutes against association members for the non-compliance with the rules provided for in the Ethics Code of the Intermediaries of the Public Trading in Securities.
34. The procedure and conditions of membership in the Association shall be defined in its Statutes. Association Statutes and any amendments thereto must be agreed with the Securities Commission prior to their registration.
35. Alongside with the Statutes, the Association of the Intermediaries of Public Trading in Securities must prepare and submit to the Securities Commission for approval the Ethics Code of its members. An association which is being newly formed may refrain from preparing its Ethics Code if it passes a decision to recognise and comply with the Ethics Code of members of an already functioning association.
36. The Association of the Intermediaries of Public Trading in Securities may impose money penalties for violations of the Ethics Code of the Intermediaries of the Public Trading in Securities or the Statutes of the Association. The Association must notify the Securities Commission of such violations. Chapter V STOCK EXCHANGE Article
37. The Concept and Purpose of the Stock Exchange
38. Only the stock exchange which has the permit issued by the Securities Commission may engage in stock exchange activities.
39. Stock exchange is a non-profit specialised enterprise registered in the Republic of Lithuania, which is engaged only in the activities of a stock exchange, the purpose of which is : 1) to concentrate the demand and supply of securities; 2) to organise trading in securities, their listing, quotation, safe and efficient transactions and settlements; 3) to promote fair trading in securities and to preclude manipulation of prices and other unfair actions; 4) to spread unified information allowing to appraise the securities quoted on the stock exchange and to publish official bulletin that provides information on prices on the stock exchange and on the issuers whose securities are listed on the stock exchange; 5) to conduct generalised studies of securities market and to make the results available to the public.
40. The authorised capital of the Exchange shall be divided into equal parts represented by shares not entitled to dividend. The Exchange is a legal entity and has its name, seal, and a bank account. The name of the Exchange must contain the words "vertybiniø popieriø birþa" (stock exchange) (or the acronym VPB). The name of the stock exchange must meet the requirements of the regulations of the names of enterprises, offices and organisations approved by the Government. Disputes concerning the name of the Exchange shall be settled in court.
41. The Exchange is a limited liability firm. It shall be liable for its obligations to the extent of all its property. Shareholders shall be liable for its obligations only to the extent of the amount that they must pay for their contributions to the authorised capital. Contributions to the authorised capital shall be represented by registered shares not yielding dividend, which entitle to participate in the trading and management of the stock exchange. One share in the stock exchange shall carry one vote. Stock exchange shares may be acquired only by brokerage firms, commercial banks which have been licenced in the manner prescribed by this Law to carry out operations in securities, the Ministry of Finance of the Republic of Lithuania and the Bank of Lithuania. Following the decision of the regular meeting of shareholders, the Exchange must issue such number of new shares as there are applications for the acquisition thereof filed by brokerage firms and banks possessing a licence issued by the Securities Commission prior to the day of the meeting.
42. A shareholder of the Stock Exchange, upon terminating his activities as an intermediary in public trading in securities, must no later than within 30 days sell the share of the Stock Exchange held by him to another person entitled to be a shareholder of the Stock Exchange. If he fails to sell the share within the specified period, the shareholder must address the Stock Exchange which shall mediate in selling the share held by him at the market price ruling at the moment. In the event of failure to sell the share within a year's period, the Stock Exchange shall repurchase it at its nominal value. The shares of the Stock Exchange repurchased by it may account for no more than 10% of its authorised capital. The shares which exceed the limit must be cancelled in accordance with the procedure established by law and the authorised capital must be reduced.
43. One shareholder, with the exception of the Ministry of Finance of the Republic of Lithuania and the Bank of Lithuania, may hold no more than one share of the Stock Exchange.
44. The Stock Exchange shall have no right to acquire securities in its own name except in cases when: 1) the Stock Exchange repurchases its own shares for reasons provided in par. 5 hereof; 2) the issuer whose shares are acquired by the Stock Exchange performs the functions of trading, settlement or other functions directly connected with the purpose of the Stock Exchange, which are provided for in the trading rules of the Stock Exchange, and the issuer's securities are not listed on the Exchange; 3) the Stock Exchange invests its temporarily free cash funds in the securities issued on behalf of the state, purchasing a certain amount thereof at primary trading in securities and keeping the securities until their maturity date. Article
45. Establishment and Registration of the Stock Exchange
46. Stock Exchanges may be founded only on the decision of the Government.
47. The founders of a Stock Exchange may be natural or legal persons who meet the requirements of par.

Article 20of this Law and who have concluded the founding agreement in a notarised form.

1. The Stock Exchange may not commence and carry out its activities if it has no permit of the Securities Commission and has not been registered with the Commission in accordance with this Law and subordinate legislation regulating the procedure of registering Stock Exchanges. A Stock Exchange may be reorganised or liquidated only with the prior consent of the Securities Commission.
2. Willing to obtain a permit for the foundation of an Exchange, its founders must file the following documents with the Securities Commission: 1) an application stating the purpose of founding an Exchange, its name, registered office, information concerning the founders and other persons responsible for the founding of the Exchange and its activities; 2) the founding agreement; 3) economic, financial and technical substantiation of the Exchange activities (business plan); 4) the Statute of the Exchange; 5) rules of trading on the Exchange; 6) the commitment of no less than 10 brokerage firms to operate on the Stock Exchange which is being founded.
3. The Statute of the Stock Exchange must contain the following data: 1) the name of the Stock Exchange and the address of the registered office; 2) the authorised capital of the Exchange and its structure; 3) the procedure for changing the rules of trading; 4) the structure of the Exchange management; 5) the competence of the meeting of the Exchange members, the procedure for calling the meeting and adopting decisions as well as conditions of invalidity thereof; 6) the formation of the Exchange Board, principles of representation and definition of the functions of the Board; 7) revenue of the Exchange and the procedure of distribution thereof; 8) the term of operation of the Exchange, conditions and procedure of its liquidation.
4. The rules of trading on the Stock Exchange must regulate: 1) the principles of listing of securities; 2) the methods and procedure of settling disputes arising because of the Exchange transactions; 3) types of transactions concluded on the Exchange; 4) the procedure of trading in securities on the Exchange; 5) procedure and conditions of including securities in the Official List and removing from it; 6) the days and hours of organising trading sessions of the Exchange; 7) the rights and duties of persons participating in the trading on the Exchange; 8) the procedure for determining and announcing the price of securities; 9) information system of the Exchange; 10) the system of Exchange transactions accounting and settlements.
5. Upon receiving all the required documents, the Securities Commission must within 3 months issue a permit to establish an Exchange or present to the founders a substantiated written refusal. The Securities Commission may request that the founders of the Stock Exchange present additional information or explain the data already filed. In this case the counting of the 3-month period shall commence anew from the filing of appropriate data or explanations.
6. The Securities Commission shall refuse to issue a permit to establish an Exchange if : 1) the Statute or founding agreement of the Exchange or other submitted documents are not in compliance with the laws of the Republic of Lithuania, decisions of the Government of the Republic of Lithuania or the Securities Commission; 2) the submitted documents contain incorrect information; 3) the presented economic substantiation of the Exchange activities is insufficient for it to adequately perform its functions; 4) the rules of trading on the Exchange do not correspond to the requirements of the Securities Commission.
7. When issuing a permit for the establishment of an Exchange, the Securities Commission shall at the same time register the Statute of the Exchange. Amendments and supplements to the Statute and rules of trading on the Exchange shall come into effect from the day of registration thereof with the Securities Commission.
8. The Board of the Exchange shall lodge with the Commission an application for registration of the Exchange: 1) after all subscribed for shares have been paid up; 2) after the statutory meeting of shareholders has been held; 3) when the Board may dispose of the funds obtained from the payment for shares.
9. The following documents shall be filed together with the application for the registration of the Exchange: 1) the statutory report and the conclusions of the auditing committee of the Exchange concerning the report; and 2) documents regarding the premises (buildings) rented or possessed by the right of ownership by the Exchange.
10. The Exchange shall be refused registration if: 1) the procedure for founding an Exchange has been violated; 2) the statutory report of the Exchange contains incomplete or incorrect information; 3) the valuation of non-monetary (property) contributions does not correspond to the actual value of the contributions; 4) documents specified in this Law have not been presented.
11. Upon eliminating the reasons set out in par. 12 which precluded the registration of the Exchange, the founders of the Exchange or the Board shall have the right to address the Securities Commission one more time requesting registration. Disputes concerning the registration of the Exchange shall be disposed of by court.
12. The Stock Exchange shall acquire the rights of legal person from the day of its registration. Article
13. Members of the Stock Exchange
14. The shareholders of the Stock Exchange shall be called its members. Only persons specified in par.

Article 20

of this Law may be members of the Stock Exchange, with the exception of cases provided for in par. 3 of Article

2. Members of the Stock Exchange shall have the following rights: 1) to participate in the management of the Exchange and to obtain information concerning the activities and financial position thereof; 2) to take part in the trading on the Exchange upon being issued the licence of the Securities Commission in accordance with the procedure established by this Law; 3) to make use of the services offered by the Exchange.
3. When realising his rights and performing his obligations on the Exchange, a member of the Stock Exchange must comply with this Law and the rules of the Exchange.
4. In the cases when a member of the Exchange violates the rules regulating the activities of the Exchange the Board of the Exchange shall have the right to suspend for up to 3 months his right to take part in the trading on the Exchange. The list of such violations shall be presented in the rules of trading on the Exchange. The decision concerning the suspension of the member's participation in the trading on the Exchange shall be adopted by a 2/3 vote of all the members of the Exchange Board. If a member of the Exchange who has violated the rules regulating the activities of the Exchange participates in the management of the Exchange (either directly or through his representative), the Board of the Exchange may suspend his powers for the above-specified period or remove the member from the managing bodies. The sanctions provided for in this item may also be imposed on the brokerage firms operating on the Exchange which are not members of the Exchange.
5. If a member of the Exchange repeatedly commits violations specified in this Law, the Board of the Exchange may, on the decision of 1/2 of all the Board members, propose to the general meeting of the Exchange members (hereinafter referred to as the general meeting) to expel such a member from the Exchange, suspending until the meeting the member's rights to participate in the trading on the Exchange. The Board of the Exchange shall suspend for the period the member's (his representative's) powers to take part in the management of the Exchange.
6. A natural or legal person who is expelled from the Exchange shall not be returned his contribution into the authorised capital of the Exchange, and the share owned by him shall be either sold to another intermediary of public trading in securities who aspires for membership of the Exchange, or cancelled. The losses inflicted on the Exchange by the expelled member shall be recovered in accordance with the procedure established by laws of the Republic of Lithuania.
7. The member of the Exchange may appeal to court against the decisions of the Board of the Exchange and the general meeting concerning the suspension or termination of membership. The filing of the appeal shall not reverse the decision of the Board of the Stock Exchange or the general meeting.
8. The Statute of the Exchange may also provide for other rights and obligations of the Exchange members provided that they are in compliance with the effective laws. Article
9. Management of the Stock Exchange
10. The management of the Stock Exchange shall be organised in accordance with the Company Law, taking into consideration the peculiarities provided for in this Law.
11. The functions of the Supervisory Board in the Stock Exchange shall be performed by the Council of the Stock Exchange. Its formation shall be mandatory. 1/3 of the members of the Council of the Stock Exchange must be persons proposed by the issuers, investors, their unions (associations, confederations, etc.) who have no property or labour relations with the intermediaries of public trading - shareholders of the Exchange.
12. A person authorised by the Securities Commission shall have the right to take part in the meetings of the Council and Board of the Exchange with deliberate vote. Article
13. The Authorised Capital and Reserves of the Stock Exchange
14. The authorised capital of the Exchange shall be formed from cash and property (non-monetary) contributions of its founders and members (shareholders).
15. The amount of the authorised capital shall be determined in the Statute of the Exchange. The minimum amount of the authorised capital and the minimum nominal value of one share shall be determined by the Securities Commission.
16. The profit of the Exchange shall consist of its revenue less its expenditures. The received profit shall be distributed into: 1) the profit reserve of the Exchange used for purchasing fixed assets and for expanding and improving the activities of the Exchange; 2) the mandatory reserve of the Exchange used for covering losses; 3) the annual payments (honorariums) which may account for no more than 1/10 of the annual net profit of the Exchange; 4) other reserves provided for in the Statute of the Exchange.
17. The authorised capital of the Exchange may be increased only by issuing additional shares.
18. It shall be prohibited to increase the authorised capital of the Exchange from the mandatory reserve, profit reserve or other reserves of the Exchange. A permission from the Securities Commission must be obtained for making any changes in the authorised capital.
19. The authorised capital of the Exchange shall be deemed increased after all shares have been fully paid up and the capital has been accordingly registered with the Securities Commission. Article
20. Revenue of the Stock Exchange
21. The proceeds from the Exchange activities may consist of: 1) fee for the registration of the Exchange transactions; 2) annual membership fee; 3) fee for obtaining the Stock Exchange listing; 4) fee for the training of the participants of the Stock Exchange; 5) fee for the fitting out of the work places and use thereof; 6) payment for information and communications services; 7) fee for attending the Exchange without the right to participate in the trading on the Exchange; 8) income from publishing and advertising activities relative to securities.
22. Specific amounts of fees and payments provided for in part 1 hereof shall be determined by the Board of the Exchange upon the co-ordination thereof in advance (prior to their coming into effect) with the Securities Commission.
23. Other payments for the services provided by the Exchange may be prescribed only upon obtaining permission from the Securities Commission. Article
24. Trading in Securities on the Stock Exchange
25. Trading in securities on the Stock Exchange shall be conducted in accordance with the rules of trading specified in Article 21 which are approved on the proposal of the Exchange by the Securities Commission.
26. The Stock Exchange may have two trading lists - the Current List and the Official List.
27. Securities shall be included in the Current List of the Stock Exchange on the decision of the Board of the Exchange, pursuant to the application of the issuer of securities or the brokerage firm. Appended to the application must be the prospectus and the last annual prospectus -statement. If the application for the listing of securities is filed by the brokerage firm, it must additionally present a copy of at least one order to buy or sell relevant securities.
28. All securities registered with the Securities Commission may be included in the Current List of the Stock Exchange. The Board of the Exchange shall have no right to refuse to include securities in the Current List of the Exchange, except in cases when documents specified in part 3 hereof are not presented or when such list is not compiled altogether. The issuer whose securities are included in the Current List of the Exchange must present to the Exchange, in accordance with the procedure established and within the time period set by it, information concerning: 1) changes in the authorised capital (if the issuer is a public company); 2) changes in the nominal value or amount of the quoted securities; 3) changing of the type or class of the quoted securities; 4) reorganisation of the issuer, announcement of bankruptcy or liquidation proceedings.
29. Securities shall be included in the Official List of the Stock Exchange on the decision of the Board of the Exchange following the application of the issuer or the brokerage firm authorised by the issuer. Attached to the application must be the prospectus, the last annual prospectus-statement, all period statements of the current year, and other information provided for in the rules of trading in securities on the Exchange.
30. The Stock Exchange must set forth the requirements which must be satisfied by the issuer in order to have his securities included in the Official List. Only fully paid securities the transferability of which is not limited may be included in the List. Other requirements shall be established in the rules of trading of the Exchange but they may not be smaller than the requirements prescribed to accountable issuers by this Law.
31. The inclusion of securities in the Official List of the Exchange shall become invalid if they are not submitted for sale within 3 months of the passing of the decision to include them in the List. In this case the issuer shall have the right to repeatedly apply to the Board of the Exchange requesting the inclusion of the securities in the Official List of the Exchange.
32. The Stock Exchange may suspend, for no longer than a 3- month period, trading in securities which are on the Official List, if: 1) trading in these securities on the Exchange has not been conducted for more than 6 months; 2) the issuer of the securities or the securities no longer meet the requirements set to the Official List; 3) the suspension of trading is necessary for the protection of investors' interests; 4) if this is required by the Securities Commission.
33. Upon suspending trading in certain securities, the Stock Exchange must without delay, on the same day notify thereof the Securities Commission and the issuer. In the event that the reasons underlying the above decision are not eliminated within 3 months of the suspension of trading, the Stock Exchange shall have the right to remove the securities from the Official List.
34. The Stock Exchange must announce the total daily trade turnover and the trade turnover and prices of the traded securities.
35. The Stock Exchange must notify the Securities Commission of : 1) securities transactions concluded on the Exchange; 2) unfulfilled orders; 3) listing of securities or their removal from the trade lists.
36. The procedure for furnishing information specified in par.11 shall be established by the Securities Commission.
37. Members of the Board and Council of the Stock Exchange, the Auditing Committee and Arbitration as well as all employees of the Exchange shall have no right to divulge, without a special authorisation of the Exchange Board, confidential information that comes to their knowledge in the course of their work on the Exchange.
38. Brokerage firm intending to conclude a transaction on the Stock Exchange, must submit an order in its name and guarantee the payment of the securities or delivery thereof to the other party of the transaction.
39. The Stock Exchange must form the Guarantee Fund which would help to improve the situation if one or several brokerage firms are not in the position to fulfil their obligations. The Guarantee Fund shall be composed of the deposits of the intermediaries of public trading in securities. The rules of the Guarantee Fund formation and use shall be approved by the general meeting of the Exchange shareholders. The funds of the Guarantee Fund may not be used to finance current expenditure of the Exchange. The Securities Commission shall have the right to determine minimum requirements for the amount and activities of the Guarantee Fund. Article
40. Reorganisation and Liquidation of the Stock Exchange
41. The Stock Exchange shall be reorganised or liquidated in accordance with the procedure established by the laws of the Republic of Lithuania, this Law and the Statute of the Exchange.
42. The Stock Exchange shall be liquidated in the following cases: 1) upon the development of a situation provided for in the Statute of the Exchange; 2) the general meeting adopts a decision to liquidate the Exchange; 3) when the own assets of the Exchange are reduced to over 50% of the authorised capital of the Exchange; 4) when the Securities Commission revokes the licence to engage in the activities of the Stock Exchange; 5) when the registration of the Exchange is revoked by the decision of the court or state institution.
43. Liquidating itself or suspending its activities, the Stock Exchange must immediately notify the Securities Commission thereof. At least one liquidator of the Exchange shall be appointed by the Securities Commission.
44. After settlement with creditors and payment of all taxes the assets of the Stock Exchange in liquidation, upon deducting the value of the reserves specified in par. 5 hereof, shall be proportionately distributed among its members-shareholders.
45. The profit reserve of the Stock Exchange, mandatory reserves and other reserves approved at the general meeting of the Exchange shall be transferred to other non-profit organisations (enterprises) or the Lithuanian State Budget. Each member-shareholder of the Exchange shall have the right to indicate, within 3 months after the discharge of the Exchange liabilities, a non-profit organisation (enterprise) to which the liquidators must transfer a portion of the Exchange reserves in proportion to his contribution. The amount of the reserves of the Exchange in liquidation that has not been transferred to other non-profit organisations (enterprises) shall be transferred to the Lithuanian State Budget in accordance with the procedure established by the Government of the Republic of Lithuania. Chapter VI ACCOUNTING OF SECURITIES Article
46. The Form and Accounting of Securities
47. All securities which may be an object of public trading shall be recorded by entries in the personal securities accounts opened in the name of the securities owners. The entry in the securities account shall be a direct proof of the right of ownership to the securities specified thereby. The securities accounts may be managed on paper or by computer.
48. Issuers who issue securities into circulation or intermediaries of public trading (brokerage firms or banks) who are participants of the Central Securities Depository of Lithuania (hereinafter referred to as the Central Depository) operating in accordance with the procedure established by Article 29 of this Law shall have the right to open and manage personal securities accounts. In the event that the provisions of this Law concerning the operating of securities accounts apply both to issuers and intermediaries of public trading in securities, both shall be hereinafter referred to as account operators.
49. The issuer shall have the right to open and manage personal accounts only of the securities issued by it, except in cases when the issuer is at the same time an intermediary of public trading in securities. The issuer must open personal accounts of the securities issued by it to each investor who has not made a written statement of delegating the management of the account to the intermediary of public trading in securities. The issuer may delegate by a notarised agreement the management of such accounts to the intermediary of public trading in securities notifying thereof the Securities Commission and the Central Depository no later than 10 days prior to delegating. The consent of investors is not mandatory for concluding the above agreement.
50. Intermediaries of public trading in securities may open and manage personal securities accounts only by concluding written agreements with investors, except in the case provided for by par. 3 hereof. The intermediary of public trading in securities may limit itself only to the management of accounts of certain issuers or accounts of certain types of securities. The public trading intermediary must give a written notice of such decision to the Securities Commission and the Central Depository. Intermediaries of public trading shall be prohibited from refusing to open and manage personal accounts of securities which are within their sphere of activities.
51. The investor may choose one or several intermediaries of public trading in securities as the managers of its personal securities accounts.
52. The issuer shall have the right to request at any time that the intermediaries of public trading who under agreement with the investors manage the accounts of securities issued by the issuer should present the list of owners of said securities. The right shall be realised by submitting an enquiry to the Central Depository.
53. The following must be specified in every securities account opened in the name of the securities owner: 1) the name and address of the operator who has opened securities account; 2) the securities account number; 3) the number of securities held in the account; 4) the class, type and date of issue into circulation of securities; 5) the name and address of the issuer of securities; 6) book -value of securities; 7) the full name (name of the enterprise) and address of the owner of securities; 8) restrictions applied to the transfer of rights incidental to the securities; 9) place and date of opening of securities account; 10) code number of the security assigned by the Central Depository.
54. The operator of securities account must notify the owner in writing of any change in its account unless the agreement concluded between them provides otherwise. At the close of a calendar year the operators of securities accounts must within 15 days present each account owner with the statement on the condition of the securities account at the end of the last day of the past year. Documents issued on the basis of entries made in securities accounts shall not be considered as securities and may not be objects of public trading.
55. Securities accounts of investors may be managed on behalf of the operator of securities accounts only by its employees possessing an appropriate written authorisation. Each operator of accounts must present the Central Depository with the list of such employees. Only the employee authorised by the manager of accounts, who manages an account shall have the right to change its contents.
56. Executives and employees of the account operator must ensure confidentiality of information that comes to their knowledge in the course of management of investors' accounts, with the exception of cases when under this Law or other laws of the Republic of Lithuania they are obliged to furnish such information.
57. Securities accounts shall be conducted according the double-entry book-keeping principle. Operators of securities accounts must keep a consolidated journal of operations in which all transactions in securities held on respective accounts and other operations effecting the condition of the account are recorded in a chronological order. Securities of each issue shall be recorded in separate sections of the consolidated journal of operations or in a separate journal. Detailed rules of securities accounting shall be approved by the Securities Commission. Article
58. The Central Securities Depository of Lithuania
59. The Central Securities Depository of Lithuania is a non-profit institution the main function of which is to conduct the general accounting of securities, prepare and implement accounting systems for securities book keepers, execute their servicing and supervision.
60. The founders of the Central Depository are the Ministry of Finance of the Republic of Lithuania, the Bank of Lithuania and the National Stock Exchange of Lithuania. The founders of the Central Depository must provide conditions for all stock exchanges founded in accordance with the procedure established by this Law to become its co- owners, however, the shares held by the Ministry of Finance and the Bank of Lithuania must entitle them to at least 51% of votes at the meeting of shareholders of the Central Depository. The Central Depository shall operate in accordance with this Law and the bylaws approved by its owners.
61. The Central Depository shall perform the following functions: 1) prepare and present to the Securities Commission for approval the rules of accounting of circulation of securities; 2) prepare and approve instructions for securities accounting which specify separate procedures provided for in the rules; 3) open and operate securities accounts of account operators; 4) ensure that during the carrying out of transactions in securities said securities be timely removed from the securities account of one account operator and placed to the securities account of another account operator; 5) supervise that the number of securities of each issue put into circulation should correspond to the number of securities which are actually in circulation; 6) prepare and implement measures which ensure the integrity and security of the system of securities accounting; 7) verify whether the account operators comply with the rules and instructions of securities accounting; 8) accumulate, process and disseminate information concerning securities accounting, train and consult specialists in securities accounting; 9) provide other services related with the servicing of securities accounts to the issuers, intermediaries of public trading in securities and investors; 10) issue the statement of securities account to the account operators .
62. The rights and duties of the members and participants of the Central Depository shall be specified in the bylaws of the Central Depository. The bylaws of the Central Depository and amendments thereto must be agreed with the Securities Commission.
63. A representative of the Securities Commission shall have the right to attend meetings of the managing bodies of the Central Depository with deliberate vote.
64. The instructions and directions issued by the Central Depository on the issues of securities accounting shall be obligatory to all account operators. Chapter VII THE SECURITIES COMMISSION Article
65. The Securities Commission - the Supervisory Institution of the Securities Market
66. Public trading in securities shall be regulated and supervised by the Securities Commission of the Republic of Lithuania (hereinafter referred to as the Securities Commission).
67. The Securities Commission is a legal entity, with its own official stamp and bank account.
68. The Securities Commission shall be formed and liquidated by the Seimas of the Republic of Lithuania on the proposal of the Government of the Republic of Lithuania. Article
69. The Composition of the Securities Commission and the Procedure of its Formation
70. The Securities Commission shall consist of the chairman and four members. The chairman and the members of the Securities Commission shall be appointed by the Seimas on the nomination of the President of the Republic for the term of 5 years.
71. During the formation of the first Securities Commission after the entry into force of this Law, powers shall be granted to the chairman of the Commission for the period of 5 years. Other members of the Commission shall be appointed to the first Securities Commission after the entry into force of this Law at the discretion of the President of the Republic for the period of 4, 3, 2, or 1 year accordingly in such a manner that in each subsequent year one member of the Commission would have to be newly elected. The chairman of the Securities Commission shall designate one member of the Commission as his deputy.
72. Upon the expiry of the term of their respective powers, by a special decision of the Seimas, members of the Commission may remain in office until the appointment of new members.
73. If the chairman or Commission members refuse their post or due to objective reasons find themselves not in the position to fill the office prior to the expiry of their powers, the President of the Republic shall appoint other persons to fill the vacancies for the remaining term of office.
74. During their term of office the chairman and members of the Securities Commission may be dismissed from their respective posts only at their own request as well as upon coming into effect of a court sentence convicting them of commission of a crime or upon their gross violation of the Code of Ethics of the Members and Employees of the Securities Commission provided for in par. 1 of Article 34 of this Law.
75. A member of the Securities Commission may not hold any other elective or appointive post, or be employed in business, commercial or any other private institutions or enterprises, with the exception of educational or creative work. Neither may he receive remuneration other than the salary of the Securities Commission member and payment for educational or creative activities. Article
76. The Objectives and Functions of the Securities Commission
77. The objectives of the Securities Commission shall be as follows: 1) to monitor the compliance with the rules of fair trade and competition in the public trading in securities; 2) to take measures assuring effective functioning of the securities market and protect the interests of investors; 3) in co-operation with the ministries, other Government institutions, the Bank of Lithuania, intermediaries and participants of public trading in securities, to shape the economic policy of the state which would promote the development of securities market; 4) to spread knowledge about the principles of securities market functioning; 5) to take other measures to implement this Law and other legal acts concerning securities market.
78. While implementing the tasks provided for in par.1 hereof, the Securities Commission shall perform the following functions: 1) prepare, approve, amend or repeal the rules regulating the licensing, establishment, reorganisation, liquidation and activities of stock exchanges and intermediaries of public trading in securities, the issue of and public trading in securities; 2) prepare, approve, amend or repeal the forms of prospectuses, annual and periodical reports and establish the procedure for filing and announcing the above documents for the issuers of securities; 3) present official explanations and recommendations on issues concerning public trading in securities; 4) issue, suspend or revoke permits and licences of stock exchanges, brokerage firms, investment management and consulting firms, brokers and other participants in the securities market whose licensing is provided for by other laws of the Republic of Lithuania; 5) monitor, analyse, inspect and in other way supervise the activities of intermediaries of public trading in securities, their association, stock exchanges, the Central Depository and its members; 6) approve and abolish the rules adopted by stock exchanges, the association of intermediaries of public trading in securities, and the Central Depository which influence or may influence the functioning of the participants of securities market and their financial condition; 7) impose sanctions provided for in this Law and other laws of the Republic of Lithuania on persons who violate this Law and the rules and instructions approved by the Securities Commission, the association of intermediaries of public trading in securities and stock exchanges; 8) register the issue of securities; 9) organise training courses, publish or take part in the publishing of publications of general character and special publications concerning the functioning and regulation of securities market; 10) organise examinations and qualifications tests with the purpose of evaluating the knowledge and competence of brokers.
79. Legal acts approved by the Securities Commission as well as its decisions, recommendations and exceptions shall apply to all subjects of private and common law of the Republic of Lithuania, with the exception of cases when the above acts, recommendations and exceptions are recognised by a court decision as being not in compliance with this Law or other legal acts possessing superior legal force.
80. The Securities Commission must prepare and present to the public and the Seimas annual report on the development of the securities market and principal events which took place during the accounting period. Article
81. Organisation of Work of the Securities Commission
82. The work of the Securities Commission shall be managed by the chairman and in his absence - by the deputy chairman.
83. The chairman of the Securities Commission shall: 1) ensure that meetings of the Commission be called regularly, determine issues to be considered at every meeting, submit reports on the activities of the Commission, in the period between meetings give instructions to the Commission members and control their implementation; 2) manage the administration of the Commission, be responsible for the drafting of normative acts, organise control over the implementation of decisions adopted by the Commission; 3) confirm by signing the decisions (resolutions) of the Commission.
84. Each member of the Commission shall be responsible for the sphere of Commission activities assigned to him and shall participate in the consideration and adoption of decisions on all issues within the competence of the Commission.
85. The Securities Commission shall organise open and closed meetings. Issues concerning the violations of this Law and other legal acts, as well as issues concerning the interests of only a single participant in the market shall be considered at closed meetings. Other issues shall be discussed at open meetings.
86. A meeting of the Securities Commission may take place if attended by at least 3 members of the Commission. Decisions shall be taken by a simple majority vote of those attending the meeting, except in cases when legal acts are adopted, amended or recognised invalid. In such cases a decision shall be deemed passed if voted in favour of by at least 3 members of the Commission. The Commission members shall have equal rights of the casting vote. In the event of a tie vote the chairman of the Commission shall have the casting vote. The decisions of the Commission meetings shall be adopted by open ballot voting if requested at least by one Commission member.
87. The administration of staff members shall be formed for the discharge of functions of the Securities Commission. The structure of the administration and its staffing not exceeding the annual wages fund approved by the Seimas shall be approved by the Commission chairman.
88. In order to perform certain works and resolve certain issues, the Commission may hire representatives and specialists of ministries, departments, other government agencies, municipalities, scientific and educational institutions, organisations, interested institutions upon agreement with their respective managers as well as invite foreign specialists and experts. Article
89. Duties of Members and Employees of the Securities Commission
90. In order to avoid the conflict of interests, the Securities Commission shall prepare the Ethics Code , which shall regulate the activities of the present and former members and employees of the Commission in the spheres regulated by this Law. This Code shall take effect upon its approval by the Seimas.
91. The present and former members and employees of the Securities Commission shall have no right to use for their own benefit or to disseminate the confidential information disclosed to them in the course of their work on the Commission.
92. Persons specified in par. 1 hereof shall be prohibited from divulging confidential information received while working on the Commission to other persons. Such information may be divulged only to state officers and employees who supervise how this Law is being complied with.
93. A person who, in cases provided by laws, has the right to receive any confidential information from the members or employees of the Securities Commission must comply with the provisions of par. 1-3 hereof. Article
94. Delegation of Powers The Securities Commission may adopt a decision to authorise a member or employee of the Commission to perform any of its functions, except the adoption, amendment, suspension or cancellation of rules and the imposition of sanctions provided for by this Law. Article
95. Financing of the Securities Commission The Securities Commission shall be financed from the State Budget. Article
96. The Rights of the Securities Commission in Investigating Violations of Legal Acts Regulating the Functioning of Securities Market
97. The Securities Commission shall have the right to organise and carry out investigations in order to determine violations of this Law and subordinate legislation enacted on the basis thereof.
98. While carrying out investigations officers of the Securities Commission shall have the right to: 1) question the persons who are connected with the violations under investigation; 2) take away temporarily, for up to 30 days, documents of the inspected intermediaries of public trading in securities, stock exchanges, the Central Depository, and issuers, which may be used as proof of the committed or intended violation, leaving behind a justified decision concerning the taking of documents and a description of the taken away documents; 3) insist on having copies made of accounting documents, contracts, orders, memoranda and other documents which the Commission considers to be of consequence for the investigation; 4) upon producing official certificates and the justified decision of the Commission or its chairman to conduct an investigation, have unimpeded access to the premises of the intermediaries of public trading in securities, stock exchanges, the Central Depository, and the issuers, and check the books, accounting documents and other sources of information which might be of use for the investigation that is being conducted; 5) upon producing justified decision of the Commission or its chairman to receive from the banking institutions data, certificates and copies of documents concerning financial operations relative to the object under inspection. Chapter VIII LIABILITY FOR THE VIOLATIONS OF THIS LAW Article
99. Effects of Violations of Law
100. Economic entities who violate this Law must: 1) act on the instructions given by the Securities Commission to terminate their actions, restore the situation to its original condition, rescind or change the agreements, comply with other orders; 2) compensate the investors for the inflicted losses; 3) fulfil sanctions imposed by the Securities Commission, provided for in this Law.
101. The Securities Commission shall have the right to impose pecuniary penalties on: 1) the issuers who have to register securities pursuant to Article

this Law but either avoid or refuse doing that - in the amount up to 10% of the total nominal value of the securities subject to registration; 2) issuers, intermediaries of public trading in securities or other economic entities who organise or conduct public trading in securities which have not been registered in the Securities Commission and in securities the registration whereof has been either suspended or annulled - in the amount equal up to the total nominal value of securities offered for public trading, in other cases - up to a three-fold amount of the total nominal value of the securities offered for public trading; 3) issuers who do not meet the requirements set forth in Article 6 of this Law - in the amount of up to 100 000 Lt; 4) economic entities who do not meet the requirements set forth in Article 8 of this Law - in the amount of up to 100 000 Lt; 5) economic entities acting as intermediaries of public trading in securities without the licence referred to in Article 11 of this Law - up to the double amount of the proceeds received illegally; 6) intermediaries in public trading in securities who fail to meet the requirements set forth in Article 13 and 15 of this Law - in the amount of up to 100 000 Lt; 7) economic entities who engage in stock exchange activities without the permit of the Securities Commission referred to in Article 21 of this Law - up to the double amount of the proceeds received illegally.

1. Prior to imposing pecuniary penalties set forth in par. 2 hereof, the Securities Commission must provide conditions for the managers of the economic entity on which the penalty is imposed to give their explanations as to the committed violation.
2. The application of sanction to economic entities, set forth in par. 2 hereof shall not release their managers from civil, administrative and criminal liability provided by the laws of the Republic of Lithuania. Article
3. Exaction of Pecuniary Penalties
4. Pecuniary penalties shall be paid into the State Budget not later than within one month from the day of receipt by the economic entity of the decision of the Securities Commission to impose a penalty.
5. If an economic entity fails to pay the penalty imposed on it within the period set forth in paragraph 1 hereof and fails to produce a copy of the court's decision suspending or annulling the decision to impose a pecuniary penalty, said penalty shall be exacted from the economic entity without suing for claims. Article
6. Appealing against the Decisions Passed by the Securities Commission
7. Economic entities may appeal to court for the reversal or changing of the decision passed by the Securities Commission within one month of the day of receipt of said decision.
8. Appeal to court shall not suspend the fulfilment of the instructions or decisions of the Securities Commission unless the court stipulates otherwise.
9. Decisions of the Securities Commission and the motives thereof shall be announced publicly. Chapter IX FINAL PROVISIONS Article
10. Transitional Period
11. The Securities Commission shall be the successor to the assets, rights and duties of the Securities Commission under the Ministry of Finance. The Securities Commission under the Ministry of Finance shall continue its activities in accordance with the statute approved by the Government of the Republic of Lithuania until the Seimas appoint the chairman and members of the Securities Commission pursuant to Article 31 of this Law.
12. The Central Securities Depository of Lithuania, established following the decision of the Government of the Republic of Lithuania, and the stock exchanges registered prior to the entry into force of this Law, must, not later than within one year, adopt amendments to their statutes and the rules pursuant to this Law.
13. The shareholders of the operating stock exchanges who do not meet the provisions of par.

Article 20

of this Law shall be entitled to further dispose of their shares, however, they may only transfer said shares to persons who qualify under specified provisions. 4. The chairman of the Securities Commission shall be paid a monthly salary in the amount of 4 average monthly wages until the law regulating wages of employess of institutions and organisations financed out of the state and municipal budgets is passed. The vice-chairman and the members of the Securities Commission shall receive a salary by 15 and 25 percent lower than the chairman of the Securities Commission. The chairman of the Securities Commission, its vice -chairman and other members of the Commission Administration may not be paid any supplements or bonuses. The wages of the employees of the Securities Commission Administration shall be fixed by the chairman of this Commission in accordance with the procedure for the payment of wages to the employees of the Prime Minister's Office, established by the Government of the Republic of Lithuania. I promulgate this Law passed by the Seimas of the Republic of Lithuania. ALGIRDAS BRAZAUSKAS President of the Republic Vilnius January 16 1996 No. I-1169 (As amended by 11 July 1996)