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Sunday 15 December 2019

Trading on MSE by non - residents

Trading in securities on the Stock Exchange is done through brokerage houses and banks who are members of the Macedonian Stock Exchange.
Trading on MSE can be arranged directly with a local brokerage house or indirectly through other foreign brokerage houses or banks that have a relationship with local brokerage houses or banks. For direct trading the relationship with local broker(s) and banks has to be established by signing an agreement with the local broker.
Documentation needed is the following:
-    the organization's/natural person’s name,
-    address
-    the ID number of the organization/natural person,
-    a notarized copy of the court-registrar's statement,
-    a notarized copy of the list of authorized representatives of the organization, with respective representatives' signatures and a valid document of a statutory representatives who may be residents or non-residents, and
-    the bank account number for transfers of money from your transactional (for natural persons) and custody (for organizations) account.

For all investors who need Custodial services, that can be arranged directly at a local custodian bank or indirectly at other banks that have a relationship with a local custodian bank. Direct custody requires a special custody agreement with a local custodian bank. For a list of banks providing custody services, see the National Bank of the Republic of Macedonia website.
For documentation needed for local custody you need to contact your locally chosen custodian.

Trading via an electronic trading system has been underway on the MSE since 2001. Stock brokers enter orders into the system directly at their premises from all over Macedonia. Since 2001, MSE has had its own Stock Exchange trading system called BEST (Bourse Electronic System for Trading) which was developed by Macedonian Stock Exchange experts. Only stock brokers authorized by an MSE member may enter orders into the BEST system. The trading system is technically and content-wise divided into two parts. Securities trading is conducted on the BEST system, while MBNet is an information support system used to facilitate trading. More about the trading system and MBNet…
Basic types of orders:
      -   market order
      -   limit order
Orders with additional conditions for realization
      -   Range order - with one-off entry
      -   fill-or-kill
Orders with additional conditions for the expiration date
      -   daily order
      -   order with validity by a certain date
Orders with special conditions for the realization of the quantity
      -   all or nothing

All trades conducted on the MSE are automatically transmitted to the Central Securities Depositary (CSD) immediately after the end of each trading session.
Initial clearing (identification of buyers/sellers, quantity of securities and prices) is conducted by the MSE BEST system at the end of each trading session. The rest of the clearing process and settlement is done by the CSD. The CSD maintains securities records of all joint stock companies in the Republic of Macedonia (more then 750 companies) in dematerialized form.
All MSE members have their cash settlement accounts in the Central Bank. There is a gross settlement of both cash and securities combined with internal CSD netting on the monetary side and a compulsory obligation of each MSE member to maintain a liquidity buffer before the final transfer of money starts on the settlement day.
Rolling settlement is implemented based on the full DVP principle (the CSD controls the simultaneous exchange of monetary funds of MSE members within the Central Bank as well as re-registration of securities ownerships within the Central Register).

The settlement period is T+3 for all securities.
Taxation of corporate income is stipulated by the Corporate Income Tax Act, governing all income of legal persons subject to Macedonian as well as International law. Corporate Income Tax Law taxes all legal persons' income, residents or non-residents. All corporate income is subject to taxation as stipulated by law. This includes returns on securities issued by public companies and other organized entities as well as dividends and earnings from interest. The tax base is taken to be the corporate profit. This is calculated as the difference between corporate income and expenses, whereby the tax rate applicable to the tax base is 10 %.
Withholding Tax on Dividends
The tax rate for foreign entities and foreign private individuals is 10%. However, the tax base can be reduced by the Double Tax Treaty signed between your country and the Republic of Macedonia. For more information visit...
Other Taxes and Charges
There are no special taxes, charges or duties and there is no stamp duty imposed on
trading in securities.
More on taxes…

Securities and Exchange Commission - SEC
The Macedonian Securities and Exchange Commission (SEC) is responsible for the supervision of the Macedonian capital market. Main tasks of SEC include granting permission for an issue of securities license, supervising MSE and CSD as well as their members, overseeing Funds Management Companies, supervising takeover procedures and reporting by publicly held companies registered in the SEC’s Registry, etc.
Recovery of Securities
Securities are held in the CSD in the name of their owners. The bankruptcy of a custodian would not have any impact on securities because banks who give custodial services maintain a separate account for their own securities. They create different accounts for each client on behalf of whom they act as a custodian.
Recovery of Cash
Deposits placed in a bank in Macedonia are guaranteed by the Macedonian Deposit Guarantee Scheme. Deposits are guaranteed up to the amount of EUR 10.000 and only for certain types of account owners. For more information visit...
Loss of Assets
The CSD is liable for compensation against damages due to loss. This includes lost income occurring due to inaccuracy or loss of data related to Dematerialized Securities and/or improper execution of a Trade Transaction or Non-Trade Transfer and/or through the violation of its rules, if the conduct arises from negligent activity by the depository employees, officers or directors.
Prices of all securities listed on the Macedonian Stock Exchange are available on-line on the MSE website. You can also find data about trading supplied by MSE at the authorized information providers.
International internet information providers are:

      -  Reuters (real-time data)
      -  Tenfore (real-time data)
      -  Thomson Financial Limited (end of day trading data)
      -  EU Trek (end of day trading data)
      -  Europoint Systems (end of day trading data)

End-of-Day Trading Data by Mail
This new service enables investors to receive an end-of-day Excel file by e-mail.
The file contains useful information on securities trading on the Exchange. It is created and automatically sent to all subscribers at the end of each trading day at around 16:30. For information about haw to register visit...
SEI-NET is the Macedonian Stock Exchange electronic dissemination information system. It is available to the public at large from the MSE website. It offers business information on companies whose securities are listed on the official market.
SEI-NET offers the following types of announcements:
-    announcements which the issuers are obliged to publish in accordance with legal regulations and MSE Listing Rules;
-    summaries of annual and semi-annual reports and financial statements;
-    information on any business or other events pertaining to business activities of an issuer that may considerably affect prices of securities (such as General Meetings of Shareholders, dividend payments, new issues of securities, material changes in the ownership structure, concluded contracts of significant importance, legal proceedings, mergers of companies, etc).

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