Authorities in Uzbekistan are reportedly preparing a sweeping new capital market law designed to expand business investment opportunities and introduce sophisticated financial instruments. Among the purported highlights of the reform is the introduction of Islamic securities known as sukuk, where returns are generated through asset-based or profit-sharing mechanisms rather than conventional interest payments. The extensive draft bill, comprising 16 chapters and 123 articles, was presented at the National Agency for Prospective Projects (NAPP) on October 14, having already cleared its first reading in the Legislative Chamber of the Oliy Majlis.

The legislative package allegedly aims to regulate a wide array of new financial instruments, including sustainable development bonds intended for environmental and social projects. Furthermore, authorities intend to legalize complex derivatives such as options, futures, forwards, swaps, and contracts for difference. While proponents claim these tools will enhance risk management and investment strategies, critics note they may introduce substantial additional vulnerabilities to the domestic market. The regulatory framework also covers covered bonds, securitized assets, and debt issues by international financial institutions.

Officials justify the legislative overhaul by pointing to the expansion of the financial sector and the inadequacy of the previous 2015 regulations, with the new draft nearly doubling in length. The drafting process involved heavy consultation with international organizations such as the European Bank for Reconstruction and Development, the International Finance Corporation, and the Asian Development Bank. NAPP projects that these regulatory adjustments will purportedly help attract an additional 10 trillion soms in investments by 2030, despite the inherent uncertainties of such long-term forecasts.

In addition to expanding financial instruments, the bill proposes sweeping structural changes to market infrastructure. These include establishing a central counterparty institution, expanding the powers of the Central Securities Depository, and creating self-regulatory organizations alongside bondholder representative bodies to protect investor interests. However, these changes remain provisional as the legislation must undergo further parliamentary debate, meaning the final scope of the regulatory framework remains subject to alteration.

Source: podrobno.uz