Mirziyoyev Reviews Comprehensive Plan to Reform Capital Market

Tashkent, Uzbekistan (UzDaily.com) — President of Uzbekistan Shavkat Mirziyoyev reviewed a comprehensive presentation dedicated to strategic measures for the further development and deep reform of the domestic capital market.

As part of the consistent liberalization of the national economy, the acceleration of state asset privatization, and the transformation of large state-owned enterprises, forming a mature financial market is becoming a key state priority to attract long-term investment resources.

A major catalyst for the reforms was the National Investment Fund's recent entry into the international stage. For the first time in the country's financial history, a successful initial public offering (IPO) of the fund's shares was conducted simultaneously on both the London and Tashkent stock exchanges.

High interest in the Uzbek capital market is also confirmed by leading international development institutions, such as the Asian Development Bank (ADB), the International Finance Corporation (IFC), and the European Bank for Reconstruction and Development (EBRD), which expressed readiness to issue their own bonds in Uzbek soums on the local platform.

To ensure high international standards of transparency and safety, the government, together with reputable international financial organizations, has developed a draft law "On the Capital Market" in a new edition. The fundamental document consists of 16 chapters and 123 articles. Its norms are aimed at radically strengthening the market infrastructure, introducing advanced instruments, and strictly protecting investor rights, which will require specific amendments and additions to more than 10 existing laws and codes of the republic.

Key financial innovations of the new draft law include:

Financial derivatives: In accordance with International Swaps and Derivatives Association (ISDA) standards, Uzbekistan is legalizing a system for concluding transactions on options, swaps, futures, and forwards, including the introduction of close-out netting mechanisms.

Covered bank bonds: A legal framework is being created for banks to issue classic covered bonds, as well as specialized securities tied to pools of mortgage loan obligations. This will allow banks to attract long-term resources and expand housing mortgage access for the population.

Islamic securities (Sukuk): The conditions for the issuance and circulation of Islamic bonds are legally established, including partnership, lease (ijara), trade, and agency types of sukuk.

A large-scale modernization will also affect the internal technological infrastructure. The new rules provide for a significant expansion of the powers of the Central Securities Depository. It is delegated the exclusive right to carry out centralized dividend payments for issuers, as well as to open direct correspondent accounts in foreign banking institutions.

In parallel, the classic institution of custodial services is being introduced in the republic. Commercial financial organizations will begin providing professional services for the storage, accounting, and settlement of client securities. A significant simplification of the rules for the admission of foreign nominee holders will open a direct and safe path to the local market for large foreign institutional investors.

The head of state emphasized that a developed capital market serves as an irreplaceable driver for attracting private investment and transforming the public sector. Following the presentation, relevant ministries and agencies received strict instructions to conduct a detailed discussion of the new draft law with international partners, accelerate the modernization of the trading IT infrastructure, and give priority attention to training highly qualified personnel for the financial industry.