BAKU, Azerbaijan, January 27. The Baku Stock Exchange (BSE) has entered discussions with regional and international brokers to advance its integration into global financial markets, Ruslan Khalilov, Chairperson of the Management Board at the BSE, told Trend.
Speaking in an interview with the agency, Khalilov noted that the BSE has been actively pursuing international integration, highlighting achievements made over the past year.
He recalled that within the framework of the Tabadul project, the BSE signed a collective exchange agreement with the Abu Dhabi Securities Exchange (ADX), the National Depository Center (NDC), and Azer-Turk Bank, emphasizing the long-term prospects of this cooperation.
“This document enabled the launch of technological connections and the testing phase. Currently, the Baku Stock Exchange continues testing technological integration with the Tabadul Trading Hub. The main objective of this work is to strengthen integration within the local market and to ensure seamless cross-border integration.
The Tabadul Hub operates as an exchange-hub model, bringing together exchanges from different countries into a single space. Through this mechanism, for example, a broker operating in Abu Dhabi could directly trade on the Baku Stock Exchange. For this, the broker must be a member of the Baku Stock Exchange.
Current legislation does not prohibit foreign brokers from becoming members of the BSE. However, there are several requirements. For instance, a foreign broker must establish an office locally or have a local representative. To simplify these requirements, we have shared our views with the Central Bank of Azerbaijan (CBA) within the framework of the review and proposed amendments to securities market legislation,” he stressed.
Khalilov emphasized that integration processes are currently being carried out mainly through the Tabadul platform, while active discussions are also underway with regional and global brokers.
“In meetings that I personally attend, we discuss what conditions are required for global brokers to connect the Baku Stock Exchange platform to their systems, what criteria are considered, and expectations regarding market turnover.
The main goal here is to determine in advance what technical, institutional, and market conditions must be met if such integration becomes possible in the future. At the same time, we analyze what advantages this model could bring to the local market and what potential shortcomings may exist,” the official said.
He explained that most global brokers operate under a multinational trading facility model and typically use smart order routing (SOR) systems.
“Through this system, if a security is listed on several exchanges, the order is automatically routed to the market offering the lowest price and minimal commission. In this context, even displaying securities traded and quoted on the Baku Stock Exchange on such platforms could be an important integration step for our market,” he said.