Uzbekistan Approves Regulations for Issuance of Mortgage Bonds within the “Regulatory Sandbox”

Tashkent, Uzbekistan (UzDaily.com) — The National Agency for Prospective Projects has approved a temporary regulation governing the issuance and circulation of mortgage bonds under a special legal framework known as the “regulatory sandbox,” the agency’s press service reported.

The document establishes procedures for the securitization of mortgage obligations and sets requirements for loans to be included in a pool from which bonds will be issued. It also defines the process for issuing bonds, their circulation, and conducting REPO operations, as well as the rules for interaction among transaction participants.

Participants include the Mortgage Refinancing Company (MRC) and its specially authorized entity UMRC SPV, originating banks, the Central Securities Depository, and the National Agency for Prospective Projects (NAPP) as the regulator.

Within the sandbox, UMRC SPV is implementing a pilot project to issue mortgage bonds totaling 1 trillion soums. The bonds are secured by a pool of mortgage loans provided by five commercial banks in the country. UMRC SPV was granted the status of a participant in the capital regulatory sandbox in September 2025. The company will take mortgage loan pools from commercial banks onto its balance sheet for the subsequent issuance of bonds secured by these loans.

The Joint-Stock Company “Central Securities Depository” acts as the paying agent, handling interest payments on mortgage bonds and the redemption of their nominal value.

Mortgage loans included in the pool must meet certain criteria: the loan-to-value ratio must be at least 75%, the borrower’s debt-to-income ratio must not exceed 70%, and at least six months must have passed since the loan was issued.

To include a loan in the pool, banks must provide a full set of documents: the mortgage and loan agreements, a repayment schedule, the insurance policy, documents proving ownership of the property, and an extract from the state register confirming the registration of the mortgage agreement.

Interest payments and redemption of the nominal value of mortgage bonds are carried out exclusively through the Central Securities Depository, ensuring transparency and control over all settlements.