Securities market to use e-disclosure system
By Nigar Orujova
Azerbaijan’s securities market will use electronic disclosure system from 2016 to eliminate the asymmetry of information and facilitate access to it.
“The system will improve the effectiveness of control on its disclosure and reduce expenses of issuers to disclose the information,” said Agaguseyn Khudaverdiyev, head of department on regulation of securities of the State Committee for Securities, on December 10.
It would be able to place the information into the system at any time, he described, and each issuer will be responsible for the information posted on the website.
Khudaverdiyev stressed that the system will allow to provide information about the issuers without editing and changes. This information can be distributed to other resources only after its placement in this system.
In his turn, head of the State Securities Committee administration Bakhtiyar Azizov said that the implementation of the information system would contribute to the development of the securities market.
“Information is the driving force behind the securities market. From this point of view, creation of electronic information disclosure system is important for investors. Easy access to information will increase the interest in the market and lead to its growth,” he said.
The government securities market of Azerbaijan fell by almost 30 times this year.
The total turnover of exchange transaction on all instruments at Baku Stock Exchange was 8.2 billion manat in January-November 2015, which is 27 percent less than the same period in 2014.
The market for government securities in the reporting period reduced by 28 times to 20.5 million manat, and the turnover of corporate securities decrease by 3.4 times to 2.17 billion manat, the stock exchange reported on December 9.
In addition, the stock market of Azerbaijan will introduce a Korean trading system.
A new trading system, which will provide a new legal framework action in the stock market, will operate in the securities market of Azerbaijan during the first half of 2016, Azizov said.
The system will be accepted after passing testing in March-April. A delegation from Korea will soon come to Azerbaijan to provide training for the staff of Baku Stock Exchange.
“The system consists of three modules. The trade unit will be under the control of the Stock Exchange. The module of post-trade calculating and clearing will be built based on the National Depository Center, and the control module has already passed to the SSC,” he explained.
Korea has one of the most advanced technologies in the securities market, he noted, and their application in Azerbaijan will be successful.
Modernizing capital market
The State Securities Committee has used more than 70 percent of credit funds of the World Bank on modernization of capital markets, Azizov said.
About $4.7 million was spent to purchase a trading system at the Korea Stock Exchange.
“The project completes on July 1, 2016, and, if necessary, we can extend its implementation, but so far, this issue is not on the agenda,” he added.
The WB allocated Azerbaijan a loan of $12 million for the implementation of the project of modernization of the capital market, at a total project cost of $15.8 million. The project is financed through credit resources of the International Bank for Reconstruction and Development.
In addition, the Swiss State Secretariat for Economic Affairs has approved the allocation of technical assistance in the amount of $1.6 million on two components within capital market development project in Azerbaijan – improvement of the legal framework and development of new financial instruments to stimulate demand in the market.