zanjan
Tuesday, August 20, 2019

Issue Guide for Public Participation Bonds for Government Projects

This guideline is based on the Law on the Issuance of Participation Bills approved by the Islamic Consultative Assembly of the Islamic Consultative Assembly of Iran on 06/07/1376 and its implementing regulations, considering the necessity of the availability of the information needed for the distribution of participation papers by the applicant organizations and with the aim of familiarizing applicants with the issue of participation bonds The process of requesting publication, obtaining permits and other required steps is made according to the requirements of the applicants.
Active funded companies

 

A) Request for the issue of bonds by the Ministry of Economic Affairs and Finance:

    The Ministry of Economic Affairs and Finance, as the executive of the state's development and profit-making projects, is subject to Article 3 of the Law on the Issue of Bonds and, after an overwhelming amount of issue of participation papers in the annual budget law of the whole country, obtains a license from the Central Bank as follows:
    In order to publish government securities bonds, it is necessary first for the government to notify the issuance of bills of participation in the annual budget law of the Central Bank of the Islamic Republic of Iran.
    After the adoption of the relevant Code, a three-member committee consisting of the Deputy of the Organization for Management and Planning, the Minister of Economic Affairs and Finance and the Director General of the Central Bank of the Islamic Republic of Iran, the total amount of participation bonds, the duration of the sale, the determination of the interest rate, and ... And send it to the Central Bank during the minutes.
    Following the above steps, the Organization for Management and Planning of the State sends a declaration of acceptance of the guarantee of government securities to the Central Bank of the Islamic Republic of Iran.
    Sending other documents to the Central Bank of the Islamic Republic of Iran.
    The Central Bank of the Islamic Republic of Iran will proceed with the necessary examinations and confirmation of existing documents regarding the granting of a license to the applicant companies.

 

B. Request for the issue of securities by government companies:
1) Demand for the issue of participation bonds by state corporations for the implementation of state-owned construction and utility projects that have been included in the company's budget for the issuance of their bonds:

    The bill of the Cabinet of Ministers on the approval of the plans as development plans and the government's advances, as well as the published ceiling, the interest rate and the method of redeeming the bonds in the form of the bill.
    During the letter of the request, the Central Bank of the Islamic Republic of Iran will receive the original agreement and after the preliminary investigations, the central agreement will be announced.
    A statement of acceptance of the guarantee issued by the Organization for Management and Planning of the country to the Central Bank of the Islamic Republic of Iran should be sent.
    The performance report of the proposed project will be sent to the posting bank after the expert review and acceptance of the agency to the Central Bank of the Islamic Republic of Iran.
    Sending other documents to the Central Bank of the Islamic Republic of Iran.
    The Central Bank of the Islamic Republic of Iran, after conducting the necessary examinations and obtaining the required conditions, will proceed with the grant of the license to the applicant companies.

(2) The request for the issue of participation bonds of state corporations that are not the executive of government development projects and allowing the issuance of securities in their budget for the implementation of their implementation plans shall be subject to article 26 of the Securities Market Act of the Islamic Republic of Iran and It is necessary to follow the rules through the Securities and Exchange Organization.
(3) The request for the issue of participation bonds of state-owned companies identified by the Supreme Council of the SB-Bond, which is exempted from registration with the Securities and Exchange Organization, will be subject to Article 27 of the Law on Securities Market of the Islamic Republic of Iran and it is necessary to follow the requirements of Section (e).

 

C) Demand for participation by municipalities:
According to Article 27 of the Law on Securities, municipal securities bonds are exempted from registration with the Securities and Exchange Organization.
1) Request for the issue of participation bonds for the implementation of government's development and profit-making projects:

    The bill of the Cabinet of Ministers on the approval of the plans as state and development plans and the publication of the ceiling, the rate of interest on income and the method of redeeming the securities in the form of the said bill will be sent to the central bank.
    During the letter of the request, the Central Bank will receive the basic agreement and after the initial reviews, the agreement will be announced by the Central Bank of the Islamic Republic of Iran.
    A statement of acceptance of the guarantee issued by the Organization for Management and Planning of the country to the Central Bank of the Islamic Republic of Iran should be sent.
    Send the performance report of the proposed project to the operating bank to be sent to the Central Bank of the Islamic Republic of Iran after the expert review and approval.
    Sending other documents to the Central Bank of the Islamic Republic of Iran.
    The Central Bank of the Islamic Republic of Iran will proceed with the necessary examinations and confirmation of existing documents regarding the granting of a license to the applicant companies.

2) Demand for the issue of partnership bonds for the implementation of profitable production, construction and services projects:
2-1) Projection of permission to issue bonds of participation in the general budget law of the whole country:

    According to the forecasting of the issue of participation papers in the annual budget law of the whole country, the municipality must apply for the approval of the central bank of the Islamic Republic of Iran.
    After receiving the principal agreement from the Central Bank of the Islamic Republic of Iran, it is necessary to obtain the Ministry of the Interior permission to determine the level of issue of bonds of participation from the budget law and the interest rate on the account and its duration and is sent to the central bank.
    After the above steps, it is necessary to submit the technical, economic, and financial justification of the proposed project by the investigative agent's bank and, if approved, to the Central Bank of the Islamic Republic of Iran.
    Sending other documents to the Central Bank of the Islamic Republic of Iran.
    The Central Bank of the Islamic Republic of Iran will apply to the municipality if the project is justified in the framework of the criteria for issuing a license to issue bonds of participation.

2) Lack of forecasting of the issue of participation bills in the general budget law of the whole country:

    First, it is necessary to determine the ceiling for issuance of bills of participation outside the budget from the money and credit council (in accordance with Note 2 of Article 4 of the Law on the Issue of Participation Bonds) and communicated to the Central Bank of the Islamic Republic of Iran.
    Send permission from the Islamic Council of the City to the Central Bank of the Islamic Republic of Iran.
    During the letter of the request to receive the principled consent to the Central Bank of the Islamic Republic of Iran, it should be announced, after the initial investigations, to be agreed upon by the Central Bank of the Islamic Republic of Iran.
    After receiving the principal agreement from the Central Bank of the Islamic Republic of Iran, it is necessary to submit a report on the technical, economic and financial justification of the proposed project by the investigative bank and, if approved, sent to the Central Bank of the Islamic Republic of Iran.
    Sending other documents to the Central Bank of the Islamic Republic of Iran.
    The Central Bank of the Islamic Republic of Iran will apply for the issuance of bonds to the municipality if the project is justified and approved in the framework of the criteria.

 

D) Demand for the issuance of securities by banks and credit institutions under the supervision of the Central Bank:
According to Article 27 of the Law on the Securities Market of the Islamic Republic of Iran, bonds of banks and credit institutions under the supervision of the Central Bank of the Islamic Republic of Iran are exempt from registration with the Securities and Exchange Organization. The issue of participation papers by banks requires the following process:

    First, it is necessary to determine the ceiling for issuance of bills of participation outside the budget from the money and credit council (in accordance with Note 2 of Article 4 of the Law on the Issue of Participation Bonds) and communicated to the Central Bank of the Islamic Republic of Iran.
    After determining the ceiling, the Central Bank of the Islamic Republic of Iran has to send a letter of request to the Principal Authorizing Officer to submit the basic agreement to the Central Bank of the Islamic Republic of Iran after the initial examination.
    Upon receipt of the principled consent from the Central Bank of the Islamic Republic of Iran, it is necessary to submit the technical, economic and financial justification of the proposed project by the investigative bank and, if approved, to the Central Bank of the Islamic Republic of Iran.
    Sending other documents to the Central Bank of the Islamic Republic of Iran.
    The Central Bank of the Islamic Republic of Iran, in the event of a justifiable project, will apply for the issuance of a partnership permit in the framework of the relationship.

 

E) Other securities exempted from registration with the Securities and Exchange Organization for the identification of the Securities and Exchange Organization:

    According to Article 27 of the Law on the Securities Market of the Islamic Republic of Iran, securities that are not required to be filed by the Securities and Exchange Organization with the Supreme Council for Securities and Exchange, such as bonds issued by other law firms and companies, the issue of bonds of participation The banks are in the process of following:
    First, it is necessary to determine the ceiling for issuance of bills of participation outside the budget from the money and credit council (in accordance with Note 2 of Article 4 of the Law on the Issue of Participation Bonds) and communicated to the Central Bank of the Islamic Republic of Iran.
    After the abovementioned ceiling has been determined, the Central Bank of the Islamic Republic of Iran will send a letter of request to the Principal Authorizing Officer after the initial reviews of the Principal Consent by the Central Bank of the Islamic Republic of Iran.
    After receiving the principal agreement from the Central Bank of the Islamic Republic of Iran, it is necessary to submit the technical, economic, and financial justification of the project to the bank subject to expert examination and, if approved, be sent to the Central Bank of the Islamic Republic of Iran.
    Sending other documents to the Central Bank of the Islamic Republic of Iran.
    The Central Bank of the Islamic Republic of Iran will apply for the issuance of bonds in the event of a justifiable project in the framework of the criteria.

 

F) Demand for the issue of partnership bonds by non-governmental institutions and public institutions and public utilities and affiliated companies, and public corporations and companies and cooperative companies:

     These institutions and institutions will be subject to Article 26 of the Securities Market Act, and it will be necessary to follow the rules through the Securities and Exchange Organization.

Attachments) related legal material

1) The Law on the Issue of Participation Bonds:


Article 1: In order to public participation in the implementation of state budget development projects in the annual budget laws of the whole country and profitable production, construction and services, to the government and government companies and municipalities, institutions and non-governmental organizations and public utilities and affiliated companies The said facilities, as well as public corporations and joint-venture companies, are authorized to receive, in accordance with the provisions of this law, part of the funds required to implement the said projects, including the financial resources necessary to supply the raw materials required by the production units through the issuance and distribution of securities M Sharkt provide.
Note: Definition of the profitability of government development projects. The subject matter of this article, subject to the legal definition of the profit-making plan, is the responsibility of a delegation composed of representatives of the Ministry of Economic Affairs and Finance, the Planning and Budget Organization and the Central Bank of the Islamic Republic of Iran. Such plans will be included in the appendix to the development plans of the annual budget of the whole country with a specific mark.


Article 3: Issuance of Participation Bonds by the Government is strictly for the purpose of financing the funds required for the implementation of the Government's State-Owned Development Plan, subject to article (1), to the extent that it is foreseen in the annual budget laws of the whole country. The guarantee of repayment of the income and profit and the realized profits of such securities by the Ministry of Economic Affairs and Finance will be based on the specific credit lines that are expected by the program and budget organization for this purpose in the annual budget laws of the whole country.
Note: Issue of Participation Bonds in order to provide financial resources necessary for the implementation of state-owned construction projects in accordance with the rules of the annual general budget of the state, which are their executors by state-owned companies or municipalities, is also subject to the provisions of this article.


Article 4: The Central Bank of the Islamic Republic of Iran shall examine the projects covered by this law, with the exception of the state-owned industrial development plan referred to in article (3) submitted by state-owned companies, municipalities, and non-governmental organizations, subject to article (1), and if they have The full economic, technical and financial justifications, after providing sufficient guarantees by the institution or the applicant company to the bank, will grant the issuance of the securities to the required extent.
Note 1: The request for the issue of bonds by state companies before being submitted to the Central Bank of the Islamic Republic of Iran must be approved by the General Assembly or the Supreme Council of the relevant companies.
Note 2: The maximum amount (ceiling) of bonds issued by the Council for Money and Credit on issues subject to this Article is determined annually in accordance with monetary and financial policies of the country.
Note 3: The amount (spreads) of bonds issued for the subject matter of this Article for each applicant should be in proportion to his net assets (total assets minus total debt).

 

2) The Law on the Securities Market of the Islamic Republic of Iran:


Article 26). From the date of the entry into force of this law, the duties and powers of the Central Bank of the Islamic Republic of Iran, the issue of Article 4 of the Law on the Issue of Participation Bonds, approved on June 30, 1997, shall be entrusted to the Securities and Exchange Organization.
Note: Participating bonds that are exempted from registration by the Securities and Exchange Organization are excluded from this article.


Article 27): The following securities are exempted from registration with the organization:
1 Government Partnership Bonds, Central Banks and Municipalities.
2 Participatory bonds issued by banks and financial and credit institutions under the supervision of the Central Bank of the Islamic Republic of Iran.
3 Securities offered in private supply.
4 The shares of each company are a joint stock company whose total equity is less than the amount determined by the Securities and Exchange Organization.
5 Other securities that are not required to be registered by the Supreme Council of the Exchange, such as bonds issued by other organizations and other authorities.
Note: The publisher of securities exempted from registration is required to report to the Securities and Exchange Organization on the specifications and specifications of the securities and the terms and conditions of its distribution and sale, in accordance with the conditions determined by the securities and stock market organization.

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