Armenian parliament passes bill on securities market
12.10.2007,
03:24
Armenian National Assembly approved Thursday the bill “On securities market” at they third, final reading, as well as amendments to a number of laws.
YEREVAN, October 11. /ARKA/. Armenian National Assembly approved Thursday the bill “On securities market” at they third, final reading, as well as amendments to a number of laws. Presenting the bill, Chairman of the Central Bank of Armenia (CBA) Tigran Sargsyan reported that the bill is part of reforms in the financial sector.
The bill is based on a model of developing securities markets in Estonia and Slovenia. According to Sargsyan the elimination of shortcomings will bring Armenia’s financial system to conformity with European standards.
“This is a necessity, as financial markets are rapidly integrated economic segments. If countries in transition show any derivations from international standards, they prevent first-class investors from entering the markets as well as members of our market, particularly commercial banks, from entering European markets,” he said.
The bill applies to the organizations that have made public offerings or the ones allowed to offer their securities for public sale. Banks and credit institutions must have the right to join the securities market without getting special licenses.
Under the bill, the Central Bank of Armenia and the Stock Exchange are commercial organizations.
The bill allows the involvement of new owners of the Depositary and Stock Exchange on a contractual basis.
Sargsyan reported that important amendments to the article on the protection of proprietors’ rights. Specifically, the supervisory body can propose that shareholders sell their shares, and if the proposal is rejected, the case can go to court.
Another important amendment is that the RA Constitution guarantees free economic competition. There arose concern that the norms must apply to the financial sector and be in the center of attention of relevant bodies.
“We agree with this proposal, and the problem will be resolved through the submission of a legislative package on monopolies and authority of relevant bodies to Parliament,” Sargsyan said.
Sargsyan said that one more important amendment is the concept of presumption of innocence – a criterion for the ones eligible for executing positions in the financial system. “The point is that, incidentally, the head of a financial service, may find himself in certain relations with law-enforcement agencies, which, however, have nothing to do with his professional duties.
In this case, it is inadvisable to relieve the person of his post before a court returns a verdict,” Sargsyan said.
He also reported that a number of amendments dealt with mechanisms of fining, and the bill contains a provision entitling the supervisory body to make a collective decision.
The CBA Chairman reported that the bill is the first step and will be improved. According to him, the bill does not contain a number of international norms. “Next year we are going to submit a new legislative package and try to introduce new mechanisms and principles simultaneously with market development thereby improving the law,” Sargsyan said.
The law enables OMX, Scandinavian Stock Exchange, to acquire Armenian Stock Exchange and Central Depository.
The Central Bank head said the agreement with OMX will be signed in late October or early November.
On April 27, 2007, OMX signed a memorandum with Armenian government and Central Bank on intention to buy Armenian Stock Exchange and Central Depository.-0---
The bill is based on a model of developing securities markets in Estonia and Slovenia. According to Sargsyan the elimination of shortcomings will bring Armenia’s financial system to conformity with European standards.
“This is a necessity, as financial markets are rapidly integrated economic segments. If countries in transition show any derivations from international standards, they prevent first-class investors from entering the markets as well as members of our market, particularly commercial banks, from entering European markets,” he said.
The bill applies to the organizations that have made public offerings or the ones allowed to offer their securities for public sale. Banks and credit institutions must have the right to join the securities market without getting special licenses.
Under the bill, the Central Bank of Armenia and the Stock Exchange are commercial organizations.
The bill allows the involvement of new owners of the Depositary and Stock Exchange on a contractual basis.
Sargsyan reported that important amendments to the article on the protection of proprietors’ rights. Specifically, the supervisory body can propose that shareholders sell their shares, and if the proposal is rejected, the case can go to court.
Another important amendment is that the RA Constitution guarantees free economic competition. There arose concern that the norms must apply to the financial sector and be in the center of attention of relevant bodies.
“We agree with this proposal, and the problem will be resolved through the submission of a legislative package on monopolies and authority of relevant bodies to Parliament,” Sargsyan said.
Sargsyan said that one more important amendment is the concept of presumption of innocence – a criterion for the ones eligible for executing positions in the financial system. “The point is that, incidentally, the head of a financial service, may find himself in certain relations with law-enforcement agencies, which, however, have nothing to do with his professional duties.
In this case, it is inadvisable to relieve the person of his post before a court returns a verdict,” Sargsyan said.
He also reported that a number of amendments dealt with mechanisms of fining, and the bill contains a provision entitling the supervisory body to make a collective decision.
The CBA Chairman reported that the bill is the first step and will be improved. According to him, the bill does not contain a number of international norms. “Next year we are going to submit a new legislative package and try to introduce new mechanisms and principles simultaneously with market development thereby improving the law,” Sargsyan said.
The law enables OMX, Scandinavian Stock Exchange, to acquire Armenian Stock Exchange and Central Depository.
The Central Bank head said the agreement with OMX will be signed in late October or early November.
On April 27, 2007, OMX signed a memorandum with Armenian government and Central Bank on intention to buy Armenian Stock Exchange and Central Depository.-0---
