Azerbaijan, Baku, Sept. 22 /Trend, N.Ismayilova/
There is an interest in establishing investment funds (IF) in Azerbaijan, but concrete proposals have not yet been submitted, the chairman of the State Securities Committee (SSC) Rufat Aslanli told reporters.
"As known, forming a legal framework was completed last month and the companies both from western and eastern markets, as well as from countries in the region have expressed their interest in entering the Azerbaijani market. Now they are studying the legal framework and market, which will take some time," Aslanli said.
Completing formation of the legal framework and the increasingly growing interest of these companies will provide submission of specific proposals, he said.
Aslanli said today this market segment in the country is being newly formed. The law of the country has certain capital requirements for the companies.
According to Aslanli, investment funds and commercial banks operate in different areas, and this minimizes competition between them.
"Basically, the services of commercial banks are used by small and medium businesses and population, but the services of the securities market - more capitalized businesses. But at the same time, certain competition remains between them," he said.
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 new draft law envisages liberalizing existing mechanism in investment funds' activity. 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.
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.
Investment funds in Azerbaijan have not been created since 1999 because of the imperfection of the legislation in this sphere.