Disclosure Requirements - Armenia
Disclosure Category: 2
In order to comply with the legislation as below mentioned, customers entering into transactions in the Armenian domestic market must consent and are hereby deemed to consent to disclosure requirements.
In the case of holding Armenian securities, Clearstream Banking S.A. (“CBL”) may fall under a legal obligation, under the Armenian Laws (as referenced below), to disclose the identity and holdings of its customers.
Background and Legal basis
For all Corporate debts instruments, including International Financial Institution (IFIs ) but excluding Sovereign debt instruments (Govies):
As described in Article 197 of the Republic of Armenia (RA) law on Securities market (dated 11.10.2007), the Legal entities, which nominee accounts are opened in Armenia should provide the information about holders (as per Articles 51 and 53 of RA law on Joint-Stock companies (dated 25.09.2001), full name and any other information) in the cases described in the following points:
- The issuer has the right to ask Central Depository of Armenia (CDA) about disclosing the information of securities' holders. (Subarticles 1, Article 197 of the RA law on Securities market).
- CDA requests the foreign nominee for the disclosing of the information mentioned in the article 51 of RA law on Joint-Stock companies. (Subarticle 2, Article 197 of the RA law on Securities market)
- Foreign nominee should take all necessary and reasonable actions for providing the information required by the CDA and identify the holders of issuer's securities, collect and provide to the CDA within 3 (three) working days. (Subarticle 4, Article 197 of the RA law on Securities market).
Foreign nominee has the right to reject the request about above mentioned disclosure, if
- it is prohibited by foreign law or the contract between the foreign nominee and it's client, or
- the client refuses to provide the required information to the foreign nominee, or
- it would lead to significant costs for the foreign nominee.
(Subarticle 6, Article 197 of the RA law on Securities market)
However, the foreign nominee shall in any case provide the required information to Armenian state bodies, if the request from those bodies is in their mandate. As example, a Nominee shall disclose the information in a request of Armenian courts and Compulsory Enforcement of Judicial Acts is they requesting based on court case. (Subarticle 7, Article 197 of the RA law on Securities market).
For all security types including Sovereign debt instrument (Govies).
The Central Bank of Armenia (CBA), as a regulator can request for disclosure based on (i) part 3 of the article 182 of RA law on Securities market, (ii) part 1 of the article 207 of RA law on Securities market, (iii) section 5 of the Regulation 5/04 of Central Bank of Armenia. Therefore, the CBA is entitled to request any information, notice or explanation which is deemed necessary.
- If the Nominee rejects the request about disclosure based on one of the three points above mentioned , the Nominee is responsible for the losses of holders caused as a result of that rejection. (Subarticle 8, Article 197 of the RA law on Securities market).
- Article 18910 of the RA Code on Administrative Offences: If the physical/legal entity rejected the government body's request or if the physical/legal entity gives false information as an answer to the government body's request, when that government body is acting based on RA law and in the scope of its mandate the physical/legal the physical/legal entity should pay 100*minimum wage.
Currently the minimum wage mentioned in this Code above is 1000 AMD according to article 3 of the RA law on minimum monthly wage which means that the penalty is 100000 AMD for each rejection and each false information.
Warning: as per above CBL may at any time be required by national and/or judicial Armenian authorities to disclose information about CBL customers and/or the beneficial owners holding positions in Armenian securities.
Unless the disclosure request is rejected by CBL’s participant via an authenticated message received from the participant, CBL will, in accordance with the above requirements, disclose information about CBL customers by default.
CBL shall not be liable for any penalty or loss (as per sanctions quoted above) faced as a result of non-disclosure by a customer and any loss or penalty will be automatically and immediately passed on to the non-compliant customer.
Attention: The authorised entity can request to disclose not only the holder, but the Authorised Nominee of that securities. According to the sub-article 1, Article 197 of RA law on Securities market Authorised nominee is a nominee, which has the right to act in the name of the Holder.