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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT MAY 2005<br />
ARMENIAN STOCK EXCHANGE<br />
Yermonya Vardevanyan<br />
Chairwoman<br />
The year 2004 witnessed a remarkable 118%<br />
increase in the value of exchange trading to<br />
nearly US$ 1.6 million, while at the same<br />
time, the number of securities traded went<br />
up by over 77%. Securities issued by 101<br />
listed companies were traded showing a<br />
25% increase over 2003. At year-end, the<br />
number of listed companies stood at 196,<br />
with 20 new companies listed on the stock<br />
exchange during 2004. Still, the number of<br />
companies which delisted was rather high<br />
too, this is primarily attributable to the<br />
ongoing changes in the corporate ownership<br />
structure.<br />
Despite the fact that only equities continued<br />
to be traded on Armenian Stock Exchange<br />
(Armex) floor, an important agreement was<br />
HISTORY AND DEVELOPMENT<br />
Armenian Stock Exchange (Armex) is the<br />
successor of the Association of Securities<br />
Market Participants, which was established<br />
in Armenia in 1997. In December 2000, it<br />
was renamed to the Armenian Stock<br />
Exchange, and on the 13th of February,<br />
2001, it was officially registered by the<br />
Securities Commission of the Republic of<br />
Armenia as a self-regulatory organization<br />
pursuant to the Law of the Republic of<br />
Armenia “On Securities Market Regulation”.<br />
Armex is the only stock exchange registered<br />
in Armenia. As a voluntary association of<br />
broker (dealer) companies and a selfregulatory<br />
organization, Armex approves<br />
rules and regulations covering a variety of<br />
activities, including listing, trading,<br />
information disclosure, as well as rules of<br />
professional ethics. The self-regulation<br />
principle provides each member company<br />
with equal rights to participate in the<br />
management of the stock exchange. The<br />
supreme management body of Armex is the<br />
General Meeting of Members, which elects<br />
the Observers’ Board. The latter elects the<br />
Chairman and appoints the Chief Executive<br />
Officer of the Exchange.<br />
PAGE 40<br />
During 2004, Armex witnessed a<br />
remarkable 118% increase in the value of<br />
exchange trading to nearly US$ 1.6 million,<br />
while at the same time, the number of<br />
securities traded went up by over 77%.<br />
reached with the Government on launching<br />
exchange trade in long- and middle-term<br />
Government bonds in April 2005. In this<br />
respect, amendments to the existing trading,<br />
clearing and settlement procedures, as well<br />
as trading system modifications were<br />
required. All of these above mentioned<br />
changes are now near completion.<br />
Throughout 2004, Armex carried on with its<br />
efforts to provide market participants and the<br />
general public with accurate, timely and<br />
complete information regarding the activities<br />
of the Armenian securities market, as always,<br />
striving to keep Armex as transparent as<br />
possible. Exchange trading statistics and<br />
information on the most recent<br />
developments and events was at all times<br />
Armex is subject to regulation by the state.<br />
The Securities Commission of the Republic<br />
of Armenia is the competent state authority<br />
to regulate the activities of the capital<br />
market, including the stock exchange, in<br />
Armenia. This is carried out through<br />
approving legislative acts and other<br />
regulatory documents, which are compiled<br />
with reporting requirements.<br />
At present the Armenian Stock Exchange is<br />
focused on improving operations, as well as<br />
trading procedures and regulations to foster<br />
a fair and transparent securities market and<br />
toward complying with worldwide industry<br />
standards.<br />
accessible both through the Armex official<br />
website (www.armex.am), and local media.<br />
Further steps were initiated to enhance<br />
cooperation in the region: of significant<br />
importance was the Memorandum of<br />
Understanding signed with the Georgian<br />
Stock Exchange in December 2004, which<br />
aims to promote information exchange and<br />
consolidate efforts in investor awareness and<br />
education.<br />
In 2005 Armex will endeavor to build on its<br />
prior achievements while fostering those<br />
positive trends that may be crucial to the<br />
ultimate success of the Armenian capital<br />
market.<br />
FUTURE OUTLOOK<br />
In 2005, Armex plans to:<br />
• launch trading in government bonds;<br />
• facilitate launch of trading in securities on<br />
a non-covered basis;<br />
• implement exchange trading in foreign<br />
exchange;<br />
• introduce the Armex index with publication<br />
on a regular basis;<br />
• establish Armex Training Center to<br />
conduct educational seminars for trade<br />
participants, broker/dealer community,<br />
reporting companies and general public;<br />
• develop and introduce capital adequacy<br />
requirements for exchange member<br />
companies; and<br />
• Continue improving regulations and<br />
practices towards compliance with WFE and<br />
IOSCO recommendations.