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Parliament adopts amendments to several laws

7 March 2016 11:49 (UTC+04:00)
Parliament adopts amendments to several laws

By Aynur Karimova

The Azerbaijani Parliament has adopted a package of amendments to the legislation, which stipulates the establishment of the Financial Market Supervisory Body at the plenary session on March 4.

In particular, amendments were made to Azerbaijan’s Tax Code, Civil Code, Code of Administrative Offences, Law on Central Bank, Law on Banks, Law on Postal Service, Law on Securities Market, Law on Investment Funds, Law on Insurance Activity, Law on Lotteries, Law on Non-Bank Credit Organizations, and others.

In February 2016, President Ilham Aliyev signed a decree on the establishment of the public legal entity - the Financial Market Supervisory Body, which 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 new amendments stipulate restricting the rights of members of the Central Bank’s board, as well as their close relatives to own predominant shares in financial institutions.

Previously, the above-mentioned individuals were prohibited to own shares only in the credit organizations controlled by the CBA.

However, under the new amendments, their owning shares in the credit institutions, insurance (reinsurance) and investment companies, controlled by the Azerbaijani government, can also be prohibited.

It is expected that 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 the 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.

Financial market stability regulation committee to be established

Azerbaijan will also establish a committee on financial market stability regulation.

Speaking at the parliamentary session, Rufat Aslanli, the Head of the working group on the establishment of the Financial Market Supervisory Body, said that the new body will be called the Committee for Financial Stability, which will be in charge of ensuring stability and sustainability in the financial sector and resolving liquidity issues.

"This is one of the points of the new mechanism, which consists of three main elements," he said adding that these elements include improvement of systemically important banks, solving the problems with liquidity in banks regardless of their role in the system, and, finally, the total risk portfolio adjustment.

"The Central Bank of Azerbaijan, the Finance Ministry and the Financial Market Supervisory Body will sign a special memorandum," Aslanli said, noting that yhe sides have already agreed upon the signing of this document.

New laws adopted

The parliament also adopted amendments to the law "On stimulation of insurance in agriculture." The changes envision that the country will liquidate the upper limit of the insurance rate, defined by the relevant executive authorities in the calculation of the amount of coverage of insurance cases in the agrarian sector.

Azerbaijan's supreme legislative body also adopted amendments to the law "On public procurement" and a law "On approval of the articles of the agreement of the Asian Infrastructure Investment Bank."

Also, the law "On Licenses and Permits" was removed from the agenda of the plenary session of the parliament after Ziyad Samadzade, the Chairman of the Parliamentary Committee on Economic Policy, Entrepreneurship and Industry, made such a proposal.

The MP explained this proposal with the fact that a list of permissions should be specified and difference between a license and a permit should be clearly explained.

Samadzade believe that the number of permits should be reduced as well.

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