Uzbekistan Approves a “Regulatory Sandbox” Regime for Investment Platforms

Tashkent, Uzbekistan (UzDaily.com) — The Director of the National Agency of Perspective Projects, Dmitry Lee, has approved regulations governing the operation of a “regulatory sandbox” for investment platforms, establishing a special legal regime for testing and piloting new measures aimed at introducing alternative investment instruments in Uzbekistan.

Under this framework, investment platforms will enable legal entities and individual entrepreneurs to raise funds for the implementation of their projects from investors, including individuals and legal entities, as well as foreign investors.

All transactions will be carried out on the basis of contracts concluded through the platform. Only a resident of Uzbekistan may act as a platform operator, and the platform’s servers must be located within the territory of the republic.

The technical tools and software used must ensure the protection of personal data, compliance with copyright and related rights, and adherence to legislation on combating money laundering and the financing of terrorism.

Information on platform participants, concluded investment transactions, business correspondence, and relationships between participants must be stored for at least five years. At the request of the National Agency of Perspective Projects, the platform is required to provide data on its activities.

The regulations place particular emphasis on the qualifications of chief operating officers, their deputies, and chief accountants of investment platforms.

These positions may not be held by individuals found guilty of involvement in terrorist activities or the creation of weapons of mass destruction, nor by persons with an outstanding or unexpunged criminal record for economic crimes, corruption, money laundering, or offenses against public administration.

In addition, candidates must have a higher education degree in economics, finance, law, mathematics, or information technology, as well as at least two years of professional experience at stock exchanges, organizations engaged in professional management in the securities market, or in the economic, financial, legal, or IT sectors.

Each platform must employ at least one staff member responsible for maintaining records of investment agreements and liaising with participants, including handling their inquiries and proposals.

To be admitted to the sandbox, a company must submit an application to the National Agency of Perspective Projects with a complete set of documents, either electronically or in paper form.

The regulator reviews applications within twenty working days and decides whether to include the applicant in the register of sandbox participants or to refuse admission.

In the event of refusal, the company is entitled to resubmit its application within 30 days after eliminating the reasons for rejection. A resubmitted application is reviewed within ten working days.

Sandbox participants are also required to submit a monthly activity report to the agency by the fifth day of each month. Failure to comply with this requirement for two consecutive months will result in the revocation of sandbox participant status.