NAPP to determine the list of foreign securities admitted to circulation in Uzbekistan

Registry of admitted securities and requirements for assets

The National Agency for Advanced Projects has approved the procedure for the circulation of foreign securities in Uzbekistan within a “regulatory sandbox”, as reported by Spot.uz. Transactions are permitted only with financial instruments included in a special registry. It may include assets of foreign issuers registered in a recognized foreign jurisdiction: shares included in foreign stock indices, bonds of foreign companies and foreign states, exchange-traded investment funds (ETFs), securities of index funds, and depositary receipts of foreign companies.

How to launch securities into circulation

An additional admission requirement is listing on a foreign trading venue with a total capitalization of assets of at least $1 trillion. To launch a security into circulation, an investment intermediary or a bank first concludes an agreement with the Central Securities Depository and then submits an application to NAPP in writing or by email. The application must indicate the international identifier (ISIN), ticker, trading venue, maximum number of securities and their volume in monetary terms, as well as the chosen trading venue: the Tashkent exchange, a foreign venue, or the intermediary’s platform. If trading takes place on a foreign venue, an agreement with a foreign investment intermediary on platform integration and a document confirming the opening of an aggregated account with the foreign partner will be required.

Timeframes, suspension and termination of circulation

NAPP reviews the application within 10 working days; up to 10 more days are allotted for coordinating the issue volume with the Central Bank, during which the review is suspended. The initiator may be asked to increase or decrease the planned volume of securities. After approval, the securities are placed on the CSD’s correspondent account in a foreign jurisdiction; the depository assigns them codes and notifies NAPP and the exchange for admission to trading.

Grounds for suspension and removal from the registry

The agency may suspend the circulation of securities in the event of a trading halt on the foreign venue, circumstances preventing the accounting and safekeeping of underlying assets or the determination of their quotations, a mismatch between the number of underlying assets and instruments in circulation, serious technical failures of the platform, as well as violations of legislation and market manipulation. The decision must specify the grounds, the term and conditions for resumption; NAPP publishes the information on its website, and the intermediary notifies investors in writing. During the transition period, the assets are given the status of “restricted circulation.” If the violations are not remedied, NAPP may terminate circulation and remove the securities from the registry — also in cases of annulment of the issue, submission of knowingly false information, or an application by the initiator (or its exclusion from the “sandbox,” if another intermediary does not take over the operations).