Azerbaijan Allows Re-release of Securities in Certificated Form

President Ilham Aliyev has ordered the application of the Law (passed on February 1, 2017) on Amendments to the Law "On securities market", according to which securities may be re-issued in paper form.

After the entry into force of the law "On the Securities Market" on July 1, 2015 all issuers of documentary securities had to withdraw them from circulation. It is about 20 joint-stock companies, including OJSC International Bank of Azerbaijan. All securities were transferred to the book-entry form and all their issuers concluded depository contracts with the National Depository Center (the only depository of securities).

The causes of change in the in the recently adopted law are not reported. The Financial Markets Supervision Authority did not respond to the written request from Turan IA about it.

Commenting on the changes in the law, a source in a local investment company told Turan documentary securities are in circulation in such neighboring countries as Turkey and Russia, where the stock market is at a higher level of development. The company suggests that these changes have been made primarily to increase investor interest in the corporate bond market. At the same time, experts believe this may be a prerequisite for the formation of shared investment funds in Azerbaijan.   ---08B