Investment funds’ minimum capital requirements approved
Azerbaijan, Baku, November 21 / Trend, N. Ismailova /
According to the approved rules of minimum capital requirements on investment funds, and management, structure, and composition of assets of investment funds, the minimum requirement on the statutory capital of joint-stock and shareholder investment funds is equivalent to 500,000 manat, the State Securities Committee of Azerbaijan told Trend on Monday.
The minimum statutory capital for a person managing assets is 125,000 manat. If as assets manager possesses a sum exceeding 1 million manat he will have to increase his consolidated capital by 0.625 percent of the excess sum per each 200,000 manat of this sum. If the excessive part of consolidated capital reaches to 2 million manat no increase of consolidated capital will be required.
Expenditures relating to investment funds management can not exceed five percent of annual expenditures.
In terms of the composition of assets, investment funds are subdivided into the following groups: investment funds of debt instruments, joint-stock investment funds, mixed investment funds, real estate investment funds, and index investment funds.
The composition of assets of investment funds of debt instruments may include money, bank deposits, state securities, municipal securities, and corporate bonds.
The composition of assets of joint-stock investment funds may include money, bank deposits, shares, securities derived from shares, and shares in open and interval shareholder investment funds.
The composition of assets of mixed investment funds may include money, bank deposits, state securities, derived securities, municipal securities, corporate bonds, and shares in open and interval shareholder investment funds.
The composition of assets of real estate investment funds may include bank deposits, state securities, municipal securities, real estates, securities derived from real estates, and shares in investment funds.
The composition of assets of index investment funds may include money, bank deposits, and securities included in the index calculation base.
The Law "On Investment Funds" was passed by the Parliament of Azerbaijan on October 22, 2010. The investment activity was earlier regulated by a similar law adopted in 1999.
Under the new Law, investment funds-related legal provisions have been liberalized up to the max.
The law specifies the exact procedure of the licensing of investment funds. Under the law, the licensing will be carried out in two stages. At the first stage, persons wishing to establish an investment fund will appeal to the State Securities Committee, which is to decide whether establishment of this fund is expedient. The period of examination of the appeal will be 60 days. At the second stage, after state registration of an investment fund is over, investment fund under formation as a legal entity will have to appeal to the State Committee again, this time for the operating license. At the second stage, the period of issue of license is limited by 30 days.
No investment funds have been established in Azerbaijan since 1999 due to imperfect legal provisions in this field.
The official exchange rate on November 21 is 0.7865 AZN/USD.