Azerbaijan defines legal framework for investment funds' activity in modern terms
Azerbaijan, Baku, August 12 / Trend I. Khalilova /
The draft law "Investment Funds" will be discussed at the autumn session of the Azerbaijani parliament. Its adoption will play an important role in the development of investment funds, chairman of the parliamentary committee on economic policy Ziyad Samadzade said. The bill has already been submitted to the Azerbaijani parliament.
"This bill will define the principles of organization, management and liquidation of investment funds in the country, economic and legal foundations of state control and regulation of funds," Samadzade said.
He said that the law "Investment funds" adopted in 1999 does not meet today's requirements. During this period the stock market of Azerbaijan was rather developed. So, the current law can not fully provide a legal framework for the modern market. "Gaps in the law do not allow more dynamic development of these processes. A new law will eliminate the existing gaps, he said.
The new law will help to develop the securities market in the country. It will contribute to the process of diversifying the economy, and will resolve other issues.
When drafting the bill experience of more than 30 countries was studied. He was also elaborated based on lessons on global financial markets.
The bill was prepared in early 2008 during the crisis on the world financial markets.
Courses of the policy were determined to prevent the global financial crisis at the meeting of "G-20" in the U.S in November last year. Two of them related to financial markets. Investment funds operate actively on the financial markets.
Experts were involved for international examination of the bill "Investment funds" within the technical assistance program of First Initiative.
One of the experts' proposals concerned opportunities to buy investment shares by the investment fund, whereas the bill envisaged free purchase on closed shares on shareholder's demand. They think it unacceptable since this may cause collapse.
The bill provides for liberalization of the existing mechanism in the field of investment funds. There are different funds in the world, including investment, mutual, venture capital. The State Committee proposed to set up a multifunctional general fund in Azerbaijan.