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Requirements on investment funds to be established in Azerbaijan made public

10 November 2011 15:08 (UTC +04:00)

According to rules, minimum amount of capital investment funds to be created in Azerbaijan is considered at AZN 500 thousand.

Minimum amount of authorized capital of a person realizing management of fundâ€™s assets is determined at AZN 125 thousand. Besides, depending on volume of assets under the management of manager the demands for authorized capital will increase too. Thus, when the volume of assets exceeds AZN 10 mln, the manager must increase authorized capital up to 0.625% (AZN 1250) of the increased amount for each AZN 200 thousand. In case when the increased part of total capital reaches AZN 2 mln, total capital is not demanded to increase. According to rules, the annual expenses related to management of investment fund can not be more than 5% of fundâ€™s assets.

According to rules, for composition of assets the investment funds are divided into some groups in Azerbaijan. These are â€“ debt instruments, stocks, mixed, real estate and index investment funds.

According to rules, along with other instruments, the investment funds can only include instruments in bourses of Organization for Economic Co-operation and Development member states

According to requirements on assets structures of investments funds, at least 25% of IFâ€™s means must be placed in the country. Requirements of other IFs on assets are different. According to common requirements, the volume of one issuerâ€™s bonds must not be over 10% of fundâ€™s assets, as well must not have over 50% of one bond issue of the issuer.

Near 70% of assets of investment fund can be invested in listed shares in stock exchanges in abroad. According to rules, the investors must be warned about the risks beforehand the selling of IFâ€™s shares to investors. Investors must sign Warning on Risks document before investing. These sentences must be herein: â€œCapital investing in IF does not promise guaranteed incomes. Depending on quantity of assets for a share, you can lose a part of your capital or income when you leave the fundâ€.

Along with these rules, â€œThe rules on attestation of IF and members of managerâ€™s executive bodyâ€, â€œRequirements of IFs on external auditorsâ€, â€œRequirements on reports of IFs and managers, as well submitting and publicizing of themâ€ were also approved.