NAPP determines who and how will receive qualified investor status

Status as a condition for access to foreign securities

The National Agency for Advanced Projects has approved the procedure for granting qualified investor status to individuals and legal entities — Spot.uz reports. The regulation allows transactions with foreign securities and financial instruments based on them within the 'regulatory sandbox' only to qualified investors. The status itself confirms the holder's 'possession of knowledge, experience and capital' and implies informed investment decision-making and acceptance of financial risks.

Criteria for individuals

An individual may obtain the status if they hold cash, securities or other financial instruments worth at least $5,000 and pass a test on basic knowledge of the securities market, investment risks, portfolio formation principles and the fundamentals of investment legislation. The content of the test, the criteria for passing it and the procedure for recording results are determined by the investment intermediary itself; the test may be administered in writing or online, including via the internet. Those who fail the test are not granted the status, and the procedure and timeframes for retaking it are set by the intermediary.

Exemption from the test and rules for companies

Exemption from testing may be granted to those who meet at least one of five conditions: transaction experience over the previous 12 months in volumes determined by the intermediary; a qualification certificate of a securities market specialist in Uzbekistan; an international certificate (CFA, CIIA, FRM, etc.) recognized by the broker's internal documents; a higher education degree in finance, economics, mathematics, business analytics, accounting, investments or financial law; or at least two years of work experience in positions related to securities transactions, investment recommendations, decision-making or risk management.

Requirements for legal entities

Companies must meet three conditions: net assets of at least 1,500 BRV (660 million soums) according to the latest financial statements, an employee on staff with a specialized higher education and at least two years of experience at a financial organization, and at least five transactions on the securities market over the previous year. Banks, insurance and reinsurance companies, investment funds, professional securities market participants and other licensed financial organizations are automatically recognized as qualified investors.

Intermediaries' obligations and the fate of the status

The investment intermediary is required to document the procedures for recognizing a client as a qualified investor, keep records, notify the client of the status being granted and disclose information about investment risks. It may restrict access to certain instruments based on their nature and risk level, and may also set additional requirements for tests while ensuring open access to such information. Quarterly, the intermediary reports to NAPP on the number of recognized investors, refusals and status revocations with summarized grounds. Loss or change of status is possible only at the client's request or if the client has provided false information: if assets decreased due to market fluctuations after the status was granted, the status is retained. For context, Spot previously reported that the capitalization of Uzbekistan's securities market tripled over two years and exceeded $25 billion.