Government of Azerbaijan, World Bank conclude implementation of Capital Markets Modernization Project

Baku, November 4, AZERTAC 

Azerbaijan’s Financial Markets Supervisory Authority (FIMSA) and World Bank have today hosted a conference to discuss the results of the Capital Markets Modernization Project (CMMP) supported by the World Bank and Switzerland’s State Secretariat for Economic Affairs (SECO). The conference was attended by the representatives of the Government of Azerbaijan, World Bank, international development partners, private business community, civil society and media. Participants took stock of Azerbaijan’s path in modernizing its capital markets, and discussed future challenges and actions to deepen financial markets and make capital market an important source of financing the country’s private sector growth and economic diversification.

Rufat Aslanli, Chairman of the Board of Directors of FIMSA, said: “CMMP has provided organizational and operational support to modernization of Azerbaijan’s capital markets. It has supported implementation of Azerbaijan’s national program for development of securities market, and made important contribution to creating state-of-the-art legal and operational infrastructure, and building capacity of the market.”

Rolf Berhnd, World Bank’s Practice Manager for Finance and Markets, said: “Improved access to finance for SMEs and increased foreign direct investments are crucial for non-oil sector development and modernization in Azerbaijan. Capital market is one of the key vehicles for domestic and international investment mobilization, but it requires concerted efforts, holistic reforms and time to do it right.”

“CMMP supported a package of reforms needed to diversify the financial sector and ease the access to alternative financing tools for Azerbaijani companies operating in the non-oil sectors. We believe that effects of the project will be transformational and long-lasting,” said Angela Prigozhina, World Bank’s senior financial sector specialist and the team leader for the project.

CMMP was approved on March 17, 2011 with a $12 million loan from the World Bank, supplemented by SECO Trust Fund grant of $1.6 million. The Project closed on July 1, 2016. It supported capital market reform program through four components aimed at enhancement of legal and regulatory framework for capital market, development of a modern capital market infrastructure for securities trading, clearing, settlement and surveillance, increased transparency, access and awareness of market participants, issuers and potential investors about capital market opportunities, and enhanced capacity of the financial regulator to enforce sound market conduct rules and investor protection practices.

Among notable results of the project are enactment in July of 2015 of the modern Law on Securities and implementation of new regulatory requirements and normative acts in line with the best international practices, establishment of Centralized Trading System (CETA) which linked investors, market-players, Baku Stock Exchange and National Depositary Center in a single trading and post-trading system, and thus, significantly reduced transaction time and costs. The project also helped streamline listing requirements at the Baku Stock Exchange and build capacity of 16 local companies under the Listing Advisory Program (LAP) to raise more than half a billion manats from the domestic capital market.

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