|Title:||Financial Industry - Capacity Development of the State Commission for Securities of the Government of Azerbaijan - Capital Markets Modernisation Project|
|Dates:||September, 2012 - December, 2015|
|Partner:||Wiener Borse AG (Vienna Stock Exchange) (Austria); CAPMEX (Austria); Moore Stephens Azerbaijan Ltd (Azerbaijan)|
The project was designed to support the Government's State Program for the development of Azerbaijan and its securities market during the period 2011-2020". The goal was to support, in the medium-term, growth of the private sector by providing opportunities for sustainable, alternative sources of financing. We worked directly with State Committee for Securities (SCS) and assist with developing Capital Market infrastructure under 4 components listed below:
1: Streamlining and Automating Market Infrastructure. This Component addressed inefficiencies by streamlining and automating market infrastructure and redefining clearing and settlement rules and processes. Under this component an integrated computerised Capital Market Information System was introduced to fully automate and integrate the trading, depository, clearing, settlement and supervisory functions.
2: Updating and Strengthening the Legal and Regulatory Framework. This Component largely built on the preparation of the draft Law on Securities for Azerbaijan. This included a review of existing capital markets related legislation in order to determine its adequacy, gaps and enforce ability to ensure that all the gaps are addressed by the draft Law. We also developed comprehensive implementing regulations. Under this component of the project a review of the business taxation policies were carried out and detailed changes to the Azerbaijan tax code were proposed to make raising finance more attractive to Azeri businesses.
3: Stimulating Supply. The Azeri capital market was characterised by low market capitalisation, little issuance, few financial products and low liquidity, which inhibited savings mobilisation for long term investments and deprives private sector from viable financing opportunities. This Component promoted the introduction and use of capital markets as a viable financing alternative by stimulating supply through a number of new instruments. We also assisted the SCS to launch a widespread corporate education program for businesses. Under this component of the project, a team of national and international professional service providers was formed under the Listing Advisory Programme (LAP). The LAP team included accountants, lawyers, investment bankers and management Consultants. The task of the team was to build a pipeline of suitable candidate for financing through capital markets. The LAP team worked with a diverse set of SMEs across industries and conducted preliminary business diagnostics, advised on strategy, corporate governance and financing needs and supported them up to the point that they were ready to list in Baku Stock Exchange for equity or debt financing. A number of educational events and workshops were organised to understand the needs of the businesses and informing them on advisory services available through LAP and capital market. In addition the consultant conduct a study on how to develop the Corporate Bond and Equity Market and Government Bond market. This included meetings and discussions with the Ministry of Finance to review their Debt Management procedures and recommendations for developing the secondary market for government bonds as the basis for establishing the yields for the corporate bonds. Details analysis of findings and recommendations were presented.
4: Capacity Building. The capital markets regulator, potential investors and market intermediaries could all benefit from increased capacity to actively engage in their respective roles within the capital market. This Component addressed this challenge by launching capacity building activities which included a series of workshops, establishment of a Capital Markets Training Centre (CMTC), public education campaign and similar market outreach techniques. In addition to offering courses to financial advisors, the CMTC offered a number of free courses to businesses to develop their understanding of corporate governance and business finance. Based on a survey of the business needs in Azerbaijan, we also developed a strategy for the CMTC to offer business consulting services in Azerbaijan. The project developed a business plan and established CMTC in 2012 and developed its training curricula and continued providing it with financial and technical support until 2016 when project ended. We also developed and delivered a number of training courses to Azeri professionals on financial management and accounting, Human Resource Management, Strategic Management, presentation and training skills, communication and report writing, time and task management and number of other capital market specific training courses.