Azerbaijan, Baku, Nov. 26 /Trend A.Akhundov /
At least 40 per cent of the capital of compensation fund at the Azerbaijani Appraisal Chamber, creation of which is provided by a draft law on appraisal activities, should be placed in state securities of the country. This is stated in the text of the draft law.
The fund's capital will be used to pay compensations to customers and / or the third parties who have suffered damage from the acts or omissions of appraisers.
"Maximum 40 percent of the fund's capital may be invested in shares of open joint stock companies which are in circulation in the securities market or shares of investment funds," the draft law says.
The draft law does not allow the fund to invest in promissory notes and securities that are not in circulation in the securities market.
According to the draft law, the Azerbaijani Appraisal Chamber has to sign a contract with the managing company for placement, storage and replenishment of the compensation fund's capital.
The managing company has to sign a contract with a specialized depositary, which, in turn, should have a contract with Azerbaijan Appraisal Chamber. The specialized depository controls implementation of requirements and regulations on placement of the funds by managing company, which must be defined by investment declaration of Azerbaijani Appraisal Chamber.
Azerbaijani Appraisal Chamber will select a managing company and the depositary on a competitive basis.
Income from the fund's capital placement will be used to increase the fund's capital and to cover the costs on management.
According to the results of the draft law's discussion last Friday, Milli Majlis (Azerbaijani parliament) Committee for Economic Policy decided to establish a working group to improve the draft law and to send it to the relevant government agencies to receive conclusions.
The official exchange rate on November 26 is 0.7848 AZN / USD