The legal basis for developing the securities market was founded by the Law on Enterprises, passed by the Supreme Council of the Estonian Soviet Socialist Republic on November 17, 1989. It allowed various businesses to pursue free economic activities.

Over the next year major entrepreneurial fields opened up and were legally regulated by decrees from the Council of Ministers of the Estonian Soviet Socialist Republic and the government of the Republic of Estonia.

The statute of the joint stock company approved by Decree of the Council of Ministers of the Estonian Soviet Socialist Republic on November 23, 1989 which fixes the share as the security could be considered the most significant one during this time period.

Since 1992 a series of acts have been adopted to establish the legal basis of the securities market and outline its operation.

1. The "Temporary instructions to regulate stock exchange activities" were approved by government decree No 6 on January 9, 1992. It defined the main terms of the exchange, its internal structure and the applying for licenses. Although still valid these regulations are now outdated and redundant.

2. The "Temporary Requirements to the Recurrent Proprietorship-Proving Securities" were approved by the government and Bank of Estonia's decree No 51 on February 17, 1992. It set out the printing and design requirements for securities.

3. The Securities Market Act was passed in 1993. It sets the regulations for professionals having dealings with the securities market, the issuers and investors on the primary and secondary market and the securities in public distribution and defines specific terms. It also deals with the public issues of securities, and market supervision.

4. The "Securities Board Charter" was approved by finance ministry decree No 154 on October 21, 1993. It set out the functions, rights, responsibilities and management as well as how the securities board, as the market's supervisory body, must report.

5. The "Rules on Issuing State Operating Licenses to Professional Participants of the Securities Market" was approved by finance ministry decree No 157 on October 25, 1993. It regulates the actions of professionals dealing on the securities market and sets out the procedures for applying for and issuing licenses.

6. The "Procedures for the Public Issue of Securities" and the "Procedures for the Registration of a Public Issue of Securities" were approved by government decree No 331 on October 29, 1993. They stipulated the required information to be included in issue prospectuses, how issues should be announced, the procedure for the primary issue and the registering of public issue of securities at the Securities Board's.

7. The "Fundamental Decree on Investment Funds" was approved by government decree No 291 on August 12, 1994. It stipulates the type of investment funds, closed and open-ended, how they should be managed and the requirements to the managing company and depository bank.

8. The "Statute of the Estonian Central Register of Securities" was approved by government decree No 374 on October 14, 1994. It stipulated the order for establishing and keeping the central register of securities, how information should be presented, used and recorded. How expenses for keeping and liquidating the register should be handled and what register data should be composed of.

9. The Commercial Code was adopted on February 15, 1995, laying down the regulations for establishing, managing and terminating different types of businesses. The Code was amended in 1996.

10. The Securities Market Act was amended in 1995 and 1996, most significantly to prohibit transactions based on confidential information and specifying the supervising authority of the securities market and fixing the penalties for breaking the law.

11. The Criminal Code and the Law on Administrative Offenses were amended in 1996. The penalties for transactions effected with the issuer's securities by the employee of the commercial undertaking dealing directly with the issuer's securities, personally or through a mediator, were added. Also set out were the penalties for disclosing, presenting or distributing false information on the public issue of securities. The penalties for violations of the Securities Market Act were added to the Law on Administrative Offenses.

12. The "Regulations for the Announcement and Registration of Public Securities Issues" was approved by government decree No 190 on July 16, 1996. This invalidated "Procedures for the Public Issue of Securities" and the "Procedures for the Registration of a Public Issue of Securities" which were approved by government decree No 331 passed October 29, 1993. It set out the requirements for information in issue prospectuses with the aim of protecting investors. Issuers became obliged to disclose more detailed information about their activities, their financial health and people responsible for the accuracy of information.

13. The Law on Investment Funds was passed on April 9, 1997. It is far more detailed and specific than the previous Charter on Investment Funds.

14. The "Statute of the Securities Inspectorate" was approved by finance ministry decree No 19 on February 17, 1997. It reorganized the old Securities Board which became the Securities Inspectorate, although its functions remained the same.

15. The "Qualification Requirements for Fund Managers and the Procedure for Issuing Qualification Certificates to Fund Manager" was approved by finance ministry decree No 65 on October 7, 1997. It laid down the requirements for fund managers, their examination requirements and how their certificates are issued or revoked.

16. The "Rules of Procedure of the Committee of Licenses for Fund Managers and Professional Participants of the Securities Market" was approved by finance ministry decree No 157 on October 25, 1993. The "Instructions for Issuing a Public License to Professional Participants of the Securities Market" was revoked by the ministry's August 29, 1997 decree No 58.

17. Parliament passed the Law on Changing the Income Tax Law on September 10, 1997 and it came into force January 1. It changed the list of Estonian generated income received by non-residents to include anything made from the disposal of securities issued by companies registered in Estonia. Non-residents must declare any such income received during the calendar year by the following March 31. Non-residents are obliged to withhold 26% income tax from their dividend payments.

18. The "List of Money Market Instruments which are the Securities in the Meaning of the Law on Investment Funds", the "Requirements for the Transactions of Derivatives on the Account of the Assets of Investment Funds", the 'List of Countries that allow investment of more than 10 percent of the Market capitalization of the Investment Fund Assets to the Securities Issued in or generated by those countries', the "List of Countries which allow investment in investment funds' assets to the securities listed on their stock exchanges or traded on their securities markets" and the "List of Countries where the public offering of shares and holdings of investment funds are registered" were all approved by finance ministry decree No 73 on November 19, 1997.