EBRD: Adoption of package of laws regulating local financial markets marks a true milestone in Armenia`s reform efforts

ArmInfo. 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", according to the statement published on the official  website of the bank. 

Mark Davis, EBRD Head of Office in Yerevan, said: "This decision  marks a true milestone in Armenia's reform efforts and confirms the  country's readiness to facilitate the further development of its  capital markets. This pioneering step will help improve the  investment climate in Armenia. We are grateful to the Central Bank  for our fruitful cooperation and we look forward to working on many  more exciting initiatives."

Nerses Yeritsyan, Deputy Chairman of the Central Bank of Armenia,  added: "We are very grateful to the EBRD for providing us with  expertise and experience in the development of this important legal  package. It 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 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 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.

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).

The EBRD is a leading institutional investor in Armenia, having  invested over EUR 1.1 billion in 153 projects in the country's  financial, infrastructure, energy and corporate sectors, with 88 per  cent of these projects being in the private sector.