The issues of further development of the capital market and the implementation of international standards in the banking sector were considered

On December 15, President Shavkat Mirziyoyev reviewed a presentation on the further development of the capital market and accelerating the implementation of international standards in the banking sector, the press service of the head of our state reports.

Currently, the market value of outstanding securities is 275 trillion soums, and the volume of securities in free float has reached 4 trillion soums. 717 issuers and 77 professional participants operate in the market.

Meanwhile, market capitalization accounts for only 20 percent of gross domestic product, significantly below global indicators. It was noted that there is significant potential in this area.

In this regard, measures aimed at attracting at least $1 billion in investment to the domestic capital market were discussed.

In particular, it is planned to allow dual listings, which involve the simultaneous placement of securities on local and foreign stock exchanges in accordance with international standards. Additionally, the introduction of new financial instruments such as foreign currency bonds, global depository receipts, foreign securities, and exchange-traded funds is envisaged.

The presentation focused on expanding the “regulatory sandbox” legal regime.

Under this regime, it is proposed to apply the sandbox conditions not only to non-residents but also to residents, establish an unlimited term for foreign investors, and permit trading in shares, bonds, and other securities of foreign companies. It is noted that this will help reduce unofficial trading in foreign securities.

Proposals for actively attracting domestic investors to the capital market were considered.

It was noted that local companies and banks will be allowed to issue foreign currency bonds on the Tashkent Stock Exchange, allowing them to raise foreign currency funds without entering the external market.

It was also emphasized that the bond market could be expanded by allowing issuers to issue unsecured bonds and bonds in excess of their own capital.

Improving the system of control and regulation in the capital market was discussed.

Plans were presented to align national legislation with the requirements of the International Organization of Securities Commissions, strengthen the regulator’s powers, and gradually increase the authorized capital requirements for professional participants.

It was noted that over the past seven years, as a result of banking system reform, commercial bank assets have increased 5.3-fold, exceeding 877 trillion soums. The number of banks has reached 35, and three foreign banks have begun operations in Uzbekistan since 2017.

Our country participated for the first time in the Financial Sector Assessment Program of the International Monetary Fund and the World Bank, which assessed such areas as banking supervision, risk management, payment systems, macroprudential policy, and crisis management.

Based on the assessment results, next year, Uzbekistan’s financial sector is planned to be fully compliant with the Basel Committee’s 29 core principles for effective banking supervision. To this end, the following objectives have been set: the full transition of commercial banks to International Financial Reporting Standards, the implementation of Basel III standards, and the establishment of a Financial Stability Council with the participation of the government and the Central Bank.

Emphasizing that capital market and banking system reform plays a key role in ensuring stable financing of the economy, increasing the share of the private sector, and fostering international investment, the head of state set specific tasks for those responsible.