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.