Uzbekistan Approves Foreign Currency Bond Sandbox Rules

Tashkent, Uzbekistan (UzDaily.com) — The National Agency for Perspective Projects has approved a regulation governing the issuance, placement, circulation and redemption of foreign currency-denominated bonds under a special legal regime known as the “regulatory sandbox” in the capital market.

The document was adopted in implementation of the Decree of the President of Uzbekistan dated December 18, 2025, No. UP-254, aimed at further improving the investment climate. Under this decision, domestic issuers are granted the opportunity to issue corporate bonds in foreign currency within an experimental legal framework.

The regulation establishes that access to the issuance and circulation of such instruments is limited to participants of the regulatory sandbox, including issuers, investment intermediaries such as underwriters, as well as agent banks. It also defines the roles of depositories, stock exchanges, and paying agents at all stages from issuance to redemption.

Special requirements are introduced for the financial stability of issuers, including the implementation of financial covenants. The framework also allows the use of special purpose vehicles for bond issuance and defines mechanisms to secure obligations.

To protect investors, the document requires the preparation of a prospectus, while separate approval of issuance decisions by the agency is not required. It also establishes unified conditions for fulfilling obligations to bondholders and introduces mechanisms for addressing potential breaches, including options for early settlement.

Issuers are required to regularly disclose information on their financial condition and the use of raised funds, increasing transparency in the market.

Special attention is given to the currency framework. The new instruments are designed to attract foreign currency funds already held by investors, including those outside the banking system, without creating additional pressure on the foreign exchange conversion market.

The adoption of the regulation is expected to expand corporate financing opportunities through non-credit instruments and create an additional source of liquidity for Uzbekistan’s national stock market.