Azerbaijan interested in creating investment funds (UPDATE)
Details added after the third paragraph (the first version was posted at 14:50)
Azerbaijan, Baku, Sept.14 / Trend, N.Ismayilova /
There is significant interest in the creation of investment funds in Azerbaijan, the State Securities Committee's deputy board chairman Ilgar Muradov said.
"Several world-known international organizations have already appealed to the committee to create investment funds in the country," Muradov said.
He said that at present, a normative legal framework in this sphere has been formed. In the near future the process of forming investment funds based on appeals will begin.
The law on investment funds was adopted by the Azerbaijani parliament on Oct.22, 2010.
Earlier this activity was regulated by a similar law, adopted in 1999.
The need to develop new legislative act is due to the fact that the previous act did not allow regulating processes on the securities market of Azerbaijan.
The new draft law envisages liberalizing existing mechanism in investment funds' activity.
There are different funds in the world. They include investment, reciprocal, mutual and venture funds. The law also envisages creating joint-stock investment funds, mutual funds, including open, closed and interval-type, closed-end mutual funds, whereas previously they could only be established as joint stock companies.
It is envisaged that adoption of such a law will allow increasing proposals in the market, as investment fund will stimulate emergence of new instruments in the market, volume of operations will expand in the market, more favorable conditions for participants.
The new version of the law envisages a number of innovations in activity of investment funds. In particular, it defines the exact procedures of investment fund licensing. Under the law, the licensing will take place in two stages. At the first stage, a person who wants to establish an investment fund will appeal to the SSC to get a permit for the reasonability of establishing a fund. Term of consideration of this appeal is 60 days. At the second stage, after state registration, created investment fund as a legal entity must re-apply to the State Committee directly for a license. At the second stage, term of license issuance is limited to 30 days.
Since 1999, investment funds in Azerbaijan have not been created, which is due to the imperfection of the legislation in this sphere.