BAKU, Azerbaijan, May 23. The National Depository Center of Azerbaijan (NDC) has initiated a project to carry out custodial services for investment fund assets without requiring a license, and preliminary operational schemes have already been developed, said Mushfig Ahmadli, Advisor to the Board Chairman of the NDC, Trend reports.
Speaking at the Financial Investment Forum held in Baku, Ahmadli emphasized the importance of custodial institutions in the infrastructure of investment funds.
“According to the law, when investment funds are established, they must appoint a custodian to register their assets. Although there is growing interest in establishing such funds in Azerbaijan, the main issue remains the absence of private custodians in the financial sector. The reason for this is that, under current market conditions, creating such custodians is not considered profitable.
Taking this situation into account, the regulatory authority proposed a legal amendment that allowed custodial responsibilities for investment funds to be assigned to the NDC. As a result, the NDC can now carry out custody of investment fund assets without obtaining a license,” he noted.
He also mentioned that implementation will roll out in stages, as there's a need to get the ball rolling on data exchange between multiple systems.
“Under the relevant legislation, investment funds are structurally divided into joint-stock and unit funds. Unit funds, in turn, are categorized as open-ended, interval, and closed-end. Each type has distinct requirements regarding asset management and information disclosure,” Ahmadli explained.
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