Azerbaijan begins to study international advanced practices on collective investments
Azerbaijan, Baku, Sept. 29 /Trend, N.Ismayilova/
Azerbaijan has begun to study the international advanced practices in the field of collective investments in order to use it for adoption of the bill on investment funds, said the head of the State Securities Committee of Azerbaijan Rufat Aslanli.
According to him, for this purpose an International Conference "Collective investments: international experience and capabilities" was held in Baku.
"The conference promotes the study of international experience and various models of collective investments that contribute to introduce new tools and transformation of small investors into large," said Aslanli.
According to him, the conference is a preparation for the implementation of the Law on Investment Funds in the future after its adoption, in view of which the international experience was considered in this regard and the Azerbaijani adaptive model was discussed.
The Azerbaijani parliament is likely to hold the second reading of the bill "On Investment Funds" during the first meetings of the autumn session.
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.