1. 1 M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Working Group for Chapter 9 – Financial Services Bilateral screening: Chapter 9 PRESENTATION OF MONTENEGRO Brussels, 10 th June 2013

2. Financial Services 2 M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 9: Financial Services Investor Compensation Scheme Aleksandar Djuričković Securities and Exchange Commission of Montenegro adjurickovic@scmn.me

3. Financial Services OUTLINE OF THE PRESENTATION LEGAL FRAMEWORK; MECHANISMS FOR REDUCTION OF SYSTEMIC RISK; GUARANTEE FUND; THE LEVEL OF COMPLIENCE; DYNAMICS OF CONVEREGENCE. 3 M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 9: Financial Services

4. LEGAL FRAMEWORK DIRECTIVE 97/9/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 3 March 1997 on investor- compensation schemes Law on securities (OGRM no. 59/00 and 28/06 and OGM no. 53/09, 73/10, 40/11 and 06/13 ) Rules of Central Depositary Agency Instructions on the exemption of client account from enforced collection. 4 M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 9: Financial Services

5. MECHANISMS FOR REDUCTION OF SYSTEMIC RISK 5 M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 9: Financial Services LAW ON SECURITIES Article 82, A licensee is obliged to keep the monetary assets, provided by the Client for payment of securities, on the separate account(s) "The Client's account", particularly opened with the authorized institutions for that purpose. The assets from the Client's account may be used only for payments under the Client's orders. The assets on the Client's account are property of the Client and not property of the licensee. These assets are neither a part of licensee's property nor a part of liquidation or bankruptcy estate, and they cannot be used for the settlement of Client's liabilities. The licensee holding or controlling the securities on behalf and for account of the Client, may not assign, pledge, lend or place those securities as deposit for obtaining a loan or advance payment, except under the written consent of the Client. The licensee must open a separate securities account for the customer in the Central Depository Agency in which it shall keep his securities for the purpose of conducting transactions.

6. Financial Services 6 M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 9: Financial Services LAW ON SECURITIES Article 93 Securities and monetary assets of members of the Central Depository Agency shall not enter into its assets or bankruptcy or liquidation estate and may not be the subject of a court order against the Central Depository Agency. MECHANISMS FOR REDUCTION OF SYSTEMIC RISK

7. Financial Services MECHANISMS FOR REDUCTION OF SYSTEMIC RISK 7 M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 9: Financial Services BANKRUPTCY / LIQUIDATION LAW ON SECURITIES Article 74 The Commission may revoke a license granted to a licensee - legal person if the decision on bankruptcy or liquidation has been passed. The suspension or revocation of a license does not influence on: – realisation of transactions with securities concluded by the person whose license has been suspended or revoked, where one party is a person with suspended or revoked license; – any right, obligation, or liability arising from such transactions. INSOLVENCY Instructions on the exemption of client account from enforced collection

8. Financial Services GUARANTEE FUND 8 M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 9: Financial Services LAW ON SECURITIES Article 98 The Central Depository Agency must create a guarantee fund. The assets of the guarantee fund shall consist of obligatory payments made by members of the Central Depository Agency. The rules for confirming the obligatory payment and the limit of the same shall be prescribed by the Central Depository Agency on the basis of a prior consent of the Commission.

9. Financial Services GUARANTEE FUND 9 M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 9: Financial Services -Securing the necessary financial resources to meet the unfulfilled financial obligations from the contractual settlement -Members jointly guarantee for the execution of the net financial obligations for contractual settlement -Mandatory contributions for guarantee fund are: - basic payments by the participants - additional payments by the participants

10. 10 Financial Services M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 9: Financial Services  Current status: No compliance with Directive 97/9/EC  Full compliance shall be achieved with adoption of the new Law on Capital Market;  Dynamics of convergence: IV quarter of 2013. Investor Compensation Scheme - Dynamics

11. 11 Thank you for your attention! QUESTIONS