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Terms: Stock broker, broker, dealer, Prospectus (issuing Prospectus), order to buy, order to sell, single auction price, indicative price, Provisional Register and Share Fund.
Answer:
• Stockbroker - legal entity founded by all applicable Law’s on Securities Trading on the organized Financial Stock Markets. Depending on the stockbroker’s organization, entities authorized for trading may act as a:
Broker - Broker trading in securities in his own name, on behalf of the client (Commissioner) or by name or on behalf of the client (Representative). A broker charges commission for his services and may play the role of a consultant. According to regulations, commission is paid pursuant to every completed transaction;
Dealer - Trader of securities in his own name and on his behalf (principal). Profit is acquired by price difference in securities (purchase price – selling price), carrying eventual risk loss. A Dealer can act as a commissioner and/or representative.
Prospectus – Document (an offering circular) – The Company’s identification card consists of data on the company’s operations and income statement sheet from the previous three years, data on activity, equity, place in the market, dividends/losses, and the opinion of an authorized auditor, data on issued shares, majority holders, and accounting equity share. The Prospectus must be certified by an authorized employee of the company and supplied to the Stock Exchange, for the purpose of scheduling trading.

Buy/sell order - Commands which client – buyer and client – and the seller provides to his broker for completion of purchasing, in other words sales of precise securities. Stockbrokers sort their client’s orders by description and price, and in this process, brokers can quickly deliver orders to buy in relation to sales.

Single auction price – The price that acquires the largest turnover of shares, compared to number of shares.

Indicative price – price placed on fluctuations borderline, which are not permissible in closing note transactions.

Temporary Register – During organization of the Central Register, the shares form a Provisional Register in the framework of the Agency for Privatization Republic of Serbia. The Provisional Register enters data on shareholders, type of shares, number of shares, and the data changes.

As of 01.01.2004, the Provisional Register no longer exists, but their operations are transferred to the Central Register.

Provisional Register distributed letters for the registration of data in the company’s book of shareholders.

Central Register – In order to secure conditions for organized trading and depositing materialized bonds foreign exchange savings on November 19, 2001, the Central Register formed and established a department in connection with The People’s Bank of Yugoslavia, which handled business of the Central Register, Deposit and Clearing House Securities.

The system was established based on the principle of registering and transferring ownership over previously deposited securities, while the currency settlements was only handled in banks. Because reconciliation of currency liabilities were in foreign currency symbols, payment was completed through foreign correspondent banks, and keeping in mind the number of links in the chain of settlements, settlements of a significant number were not completed in an estimated time frame T + 3 (3 days after trading). Besides the fact, this system was very expensive, because to every completed money transfer was an additional international income turnover fee, and if the sum were at times smaller than 100 euros, transactional fees would reach up to 5 % of market value transaction.

Since the system did not gratify user demands nor was it in conformity with international standards, in the beginning of 2002 in order to eliminate overseen shortcomings, redesigning of the whole process began with the implementation of the procedural and technical aspects of the system, with the goal to relinquish deficiencies. In addition to this, admission of new functions in the operations of the Securities Central Register where they initiated clearinghouse functions, in other words centralized settlements of monetary transactions. Unifying securities settlements with monetary events that enabled the realization of basic principles that founded modern Deposit and Clearing House Organizations, which, are defined by the concurrent payment, and transfer of shares ownership (delivery vs. payment - DVP).

A new project formally began in the spring of 2002, and due to the fact it worked in conjunction with the registering of securities and connected clearing functions; it was given the business name “BEOKLIRING” – by importance on Euroclear.

Opportune circumstances before implementation of the new concept lead to the reality of the simultaneous written process of the new Law on Securities and other financial instruments. This law is incorporated and is the legal foundation of the model of the Central Deposit Institutions. Perimeter reduction of trading immediately following the winter holidays is used as the beginning of operations, so January 14, 2003 is the time of the year that new platforms are established for clearing and settling securities and become official operatives.

The elimination of delays in settlements, significant reduction of risk, and transaction costs brought to an acceptable level. Assertion and effectiveness of the system have attracted new creators of securities, so that aside from bonds of foreign exchange savings and treasurer’s certificates of the People’s Bank of Serbia, from April of 2003 the Central Register of Securities completes registration and primary sales of short term securities that are created by The Republic of Serbia – Treasury Bonds.

The entire system operates on its own by the Central Register of Securities and its separation from the People’s Bank of Serbia in December of 2003, as well as the transfer of the owner’s database of shares from the Agency for Privatization - Provisional Registration in January of 2004.

Share Fund – legal entity establish according to Law on Share Fund (Official Gazette of RS No. 38/2001) whom shares are transferred to, in other words disbursed to:

remaining after the accession of new law enforcement which are bound to privatization for companies that have completed socialized privatizations, in other words federal capital applicable to drafts in Law of Ownership Transformation (Official Gazette of RS, No. 32/97 and 10/2001);
shareholders who discontinued making payments on registered shares which are paid on the basis of Law on Corporate Capital (Official Gazette of the United Republic of Yugoslavia, No. 84/89 and 46/90, Law on guidelines and procedure converting companies ownership into other forms of ownership) (Official Gazette of RS, No. 48/91, 75/91, 48/94 and 51/94)and Law on Ownership Transformation (Official Gazette of RS, No. 32/97 and 10/2001);
the Fund for development of Republic of Serbia Transport Share Fund for sales;
remaining after sale of capital in residual privatization in compliance to all applicable laws that condition privatization;
The Share Fund is liable for shares that are in its possession and must sell no later than six years from the day of enforced law that condition privatization.
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