Azerbaijani parliament to consider bill "On Investment Funds" in autumn session
Azerbaijan, Baku, Sept. 21 / Trend N. Ismayilova /
The Azerbaijani parliament is likely to hold the second reading of the bill "On Investment Funds" during the first meetings of the autumn session, Azerbaijani State Securities Committee Chairman Rufat Aslanli said on Tuesday.
"We are conducting intensive discussions with the parliament and the bill is already prepared for the second reading," Aslanli said.
The committee has already held talks with the leadership of the relevant parliamentary committee.
The new law envisages establishing joint-stock share funds, as well as open and closed share funds with an interval share. The activities of investment funds will be licensed by State Securities Committee.
The bill allows for the opening of representative offices of foreign investment funds in Azerbaijan, which will serve the citizens of Azerbaijan outside the jurisdiction of the country. At the same time, mechanisms that regulate the activity of such funds abroad should not be weaker than the mechanisms adopted in Azerbaijan, which is a basic requirement for the protection of the Azerbaijani investors.
The investment funds are specific financial institutions which should be managed by professional managers capable of conducting operations on stock markets. Investment funds can place their funds in various financial assets such as stocks and debt instruments with fixed incomes.
The investment funds are prohibited, as banks, to declare a fixed rate of return, because they allocate funds to riskier assets, particularly in stocks, the yield of which depends on dividends. Therefore, it would be wrong to give guarantees.
The committee has studied the experience of 30 countries and European Union directives when drafting the bill.
Experts from the First Initiative technical assistance program have been involved in the preparation of the bill.
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