New rules for capital market development discussed in Uzbekistan
An international round table dedicated to the draft law "On the Capital Market" was held in Tashkent. The document is designed to create a modern legal and institutional framework for the accelerated development of the market and its integration into the international financial system. On October 5, the international round table "The Law 'On the Capital Market': A New Step Towards the Accelerated Development of the Capital Market of the Republic of Uzbekistan" took place in Tashkent. The event was organized by the National [...]
New Rules for Capital Market Development Discussed in Uzbekistan
An international round table dedicated to the draft law "On the Capital Market" was held in Tashkent. This document is intended to form a modern legal and institutional framework for the accelerated development of the market and its integration into the international financial system.
On October 5, Tashkent hosted the international round table "The Law 'On the Capital Market': A New Step Towards the Accelerated Development of the Capital Market of the Republic of Uzbekistan." The event was organized by the National Agency for Perspective Projects (NAPP) in cooperation with the International Finance Corporation (IFC) and the UNDP.
The discussion was attended by representatives of the Senate and the Legislative Chamber of the Oliy Majlis, NAPP, international financial organizations, development institutions, experts, and representatives of the capital market infrastructure.
The draft law has already passed its first reading in the Legislative Chamber of the Oliy Majlis and is being prepared for the second reading. The document consists of 16 chapters and 123 articles, providing for a comprehensive update of capital market regulation in line with international standards and best practices.
What Changes the Draft Law Provides For
One of the main areas of focus will be the expansion of financial instruments. The draft law creates a legal framework for the introduction of derivatives — options, swaps, futures, forwards, and contracts for difference.
In addition, it provides for the possibility of using covered and securitized bonds, bonds of international financial institutions, and sustainable development instruments.
A separate section is dedicated to Islamic finance. It is proposed to establish a legal mechanism for the issuance of sukuk in accordance with the principles of Islamic finance.
New Infrastructure and Investor Protection
The draft law provides for the development of professional market participants. In particular, it proposes to introduce separate licensing for custodial activities, as well as to improve the regulation of rating agencies, management companies, and investment funds.
Another innovation will be the institution of a central counterparty, which will clear transactions and help improve settlement reliability and risk management.
To protect investors, it is proposed to introduce the institution of a representative of sukuk and bondholders, as well as to classify individuals into qualified and unqualified investors based on their knowledge and experience.
Uzbekistan on the Way to International Markets
Significant attention in the draft law is paid to international integration. It provides for the improvement of mechanisms for Uzbek companies to enter foreign markets, the placement of securities of non-residents in Uzbekistan, and the issuance of bonds by international financial institutions.
This is expected to open up additional opportunities for attracting foreign investment and expand the access of domestic companies to external sources of financing.
During the round table, international experts presented practical approaches to the development of securitization, covered bonds, sukuk, GDRs, IPOs, and derivatives. Representatives of the ADB, IFC, UNDP, EBRD, Franklin Templeton, and Centil took part in the discussion.
The participants also discussed the further development of the national market infrastructure, international standards, and prospects for integrating Uzbekistan's capital market into the global financial system.