Major Changes In Regulation Of Banking And Finance In Azerbaijan

A number of significant amendments in the regulation of the banking and finance sector of the Republic of Azerbaijan were made in the first half of March 2016.

Start of Operations of the Chamber for Control of Financial Markets

On 10 March 2016 the President of the Republic of Azerbaijan signed a decree approving the charter (the "Charter") of the newly-established Chamber for Control of Financial Markets (the "Chamber"). The Chamber assumed the functions of the following now-defunct state bodies: the State Committee for Securities, the State Insurance Supervision Service of the Ministry of Finance and the Financial Monitoring Service under the Central Bank.

Under the Charter, the Chamber is a public legal entity that licenses, regulates and supervises participants of the securities market, investment funds, insurance and credit organizations (banks, non-banking credit organizations and postal operators) and payment systems and ensures transparency and flexibility in its supervision.

The Chamber can adopt legal acts regulating the financial markets, issue and revoke licenses of the participants of the financial markets, and carry out inspections of said participants.

The Chamber is exempt from taxes but cannot engage in business activities and its revenues are used to fund its operation.

The activities of the Chamber are supervised by the Board of Directors, which consists of five members and is chaired by the chairman - Mr. Rufat Aslanli, chairman of the now-defunct State Committee for Securities of the Republic of Azerbaijan.

The day-to-day activities of the Chamber are supervised by the Management Board consisting of six members.

New Role of the Central Bank

The Central Bank of the Republic of Azerbaijan (the "Central Bank") has lost the vast majority of its functions. This happened pursuant to the amendments to the law On the Central Bank approved by the President of the Republic of Azerbaijan on 10 March 2016.

The Central Bank has been transformed from a state body to a public legal entity and its charter capital has been transformed into the charter fund.

The Central Bank's goals have been reduced to the organization and maintenance of the centralized interbank and other...