Azerbaijan, Baku, Oct.8 / Trend, I.Khalilova /
The Azerbaijani Parliament adopted at the second reading today a bill "On investment funds" that had been prepared by the Securities Committee.
Submitting the bill, the chairman of the parliamentary committee for economic policy, Ziyad Samadzade, said the adoption of this law will play an important role in the development of investment funds.
"This bill will define the principles of organization, management and liquidation of investment funds in the country, the economic and legal framework of state control and regulation of funds," he said.
After the adoption of the bill at first reading, a working group held several meetings to discuss the proposals voiced by MPs during consideration of the bill. However, fundamental changes have not been made in the bill, and the changes have mostly been editorial and stylistic in character.
Given that the bill on investment funds has taken into account all the progressive points after the first reading, drastic changes have not been made.
Preparation of a new law was prompted by the fact that the 1999 Law on Investment Funds does not meet today's requirements.
The new law will contribute to the development of securities market in the country that will contribute to the diversification of the economy, and help solve other problems.
The committee has studied the experience of 30 countries and European Union directives when drafting the bill.
The bill was prepared in early 2008, a period of increased crisis in global financial markets.
Adoption of this law will expand proposals in the market, as investment funds will stimulate emergence of new tools, volume of operations will expand and better conditions for the participants will be created.
The new edition of the bill envisages a number of innovations in the activities of investment funds. In particular, under current law, investment funds in Azerbaijan can be created only in the form of joint stock companies.
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 envisages maximum liberalization of the existing mechanism in the field of investment funds.
The new edition of the bill defines the exact procedure for licensing of investment funds. Under the bill, licensing will be held in two phases. At the first stage of a person wishing to establish an investment fund will appeal to the SSC to obtain a permit for the reasonability of establishing a fund. The term of consideration of this appeal is 60 days. In the second stage, after the state registration, the created fund as a legal entity must reapply to the State Committee directly for a license. The term of consideration of the application for a license is 30 days.
Since 1999, Azerbaijan has created only one such fund - the Check and Investment Fund "Sigma."