Armenia passes a new package of laws regulating the local financial markets
The Armenian parliament has passed a package of laws regulating the local financial markets and amendments to the law on the securities market, following close cooperation with the European Bank for Reconstruction and Development (EBRD). The EBRD welcomed the decision as a “milestone”.
The new law provides for the enforceability of derivatives transactions, including netting, close-out netting and financial collaterals, amends over 17 laws and introduces more than 15 new regulations to Armenia’s financial legislation, including settlement finality.
The EBRD provided technical cooperation to the Central Bank of Armenia for the drafting of the package. Experts, funded by the EBRD-managed Shareholder Special Fund, worked with the Central Bank on the legal reform. This project was also coordinated with, and supported by, the International Swaps and Derivatives Association(ISDA).
Mark Davis, EBRD head of Office in Yerevan, says the move, “Confirms the country’s readiness to facilitate the further development of its capital markets.”
Nerses Yeritsyan, deputy chairman of the Central Bank of Armenia, explains that the reforms, “represents a big step forward in creating the conditions in which our economy can move to a more sophisticated stage of development. Armenia has a strong sense of entrepreneurship and it is for lawmakers and regulators to enable these forces.”
The legal package adopted by parliament opens the door for hedging tools, including foreign currency and interest rates and allows banks and corporates to properly manage their risks. This is an important step to attract investors, including the EBRD.
2016 has also seen the extension of the EBRD SME Local Currency Programme to Armenia. This framework offers local small and medium-sized enterprises (SMEs) lending in local currency. In exchange for better access to affordable funding, Armenia has committed itself to continuing reforms to improve, broaden and deepen its local currency and capital markets.
Source: FTSE Global Markets
