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Financial market supervisory body to be self-financing

11 February 2016 09:57 (UTC+04:00)
Financial market supervisory body to be self-financing

By Aynur Karimova

The newly-established public legal entity - the financial market supervisory body - will operate based on the principle of self-financing.

This was stated by Shahin Aliyev, the Head of Department of Legislation and Legal Expertise of the Azerbaijani President's Administration, on February 9.

He told Azertag state news agency work on the draft charter of the body is underway.

"This supervisory body is absolutely independent and does not depend on budget financing," he said.

According to the presidential decree, the draft charter of the body will be developed within a month

Azerbaijan has replaced the individual supervisory authorities in the financial sector with a single regulator to simplify procedures and enhance control. On February 3, President Ilham Aliyev signed a decree on the establishment of a public legal entity - the financial market supervisory body - in Azerbaijan.

This body,which will be the heir of the entire property of the the State Committee for Securities, the State Insurance Supervision Service under the Finance Ministry, and the Financial Monitoring Service under the CBA, and handle all their functions, is expected to facilitate the CBA's work.

The mentioned structures will be liquidated on the date the financial market supervisory body’s Charter enacts.

Touching upon the possibility of coincidence of functions of the newly-established body and the Central Bank of Azerbaijan, Aliyev said all functions will be divided.

He also did not exclude the possibility of establishing a similar public legal entity in other sectors, including in the education field.

"The charters of schools and universities are being reviewed," he noted. "Public legal entity can provide both paid and free services. As I said, they can be financed and not financed from the state budget. This model can meet the requirements of state administration, it is a very flexible and elastic model which is able to empower the state even more."

Aliyev said Azerbaijan will make amendments to the relevant laws in this regard.

"The head of state has instructed the Cabinet of Ministers to submit proposals on bringing the existing legislation into conformity with the signed documents," he said. "We have based upon the best practices of the Western countries in the development of these documents."

The supervisory body was established within the framework of ongoing structural reforms to improve the business environment, promote transparency and increase efficiency of public administration.

This body will cover all aspects of regulation of financial and banking activities based on the best international principles.

It will be in charge of licensing, regulating and controlling activities of securities market, investment funds, insurance and credit institutions (banks, non-bank credit institutions, postal operator) and payment systems.

The financial market supervisory body will help to improve the control system to counteract legalization of money or other property received by criminal way and financing terrorism, as well as ensuring transparency and flexibility of the control system in these areas.

To ensure transparency the body will be managed in accordance with the principles of collegial governance, and the principles of operational and financial independence will be taken as a basis.

The charter, the structure and composition of the Board of the body will be determined within a month, according to the presidential decree.

The establishment of a financial market supervisory body in Azerbaijan will improve the management and regulation mechanisms of the financial market of the country, and open new opportunities for pursuing a unified policy and regulatory standards on the financial market.

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Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

Follow us on Twitter @AzerNewsAz

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