Core principles

Core Principles for Securities Markets

As an international financial institution with a mandate to assist the countries of central and eastern Europe and the CIS in their transition to market economies, the EBRD attaches great importance to the modernisation of the financial institutions and markets in the region. This commitment is demonstrated by the fact that a larger proportion of the Bank’s investment and lending activities is directed towards the financial sector than any other sector. The impact of these activities on the development of market economies in the EBRD’s countries of operations is maximised as a result of these institutions’ central role in financial intermediation. Healthy banks and liquid capital markets together foster savings and investment which, in turn, drives development and growth of the private sector.

Read more about the Bank's role in Law in transition - Spring 1999: Financial markets.

The EBRD regularly conducts assessments and surveys to measure the extensiveness and effectiveness of legislation in its countries of operations. The extensiveness of securities markets legislation was last assessed by the EBRD in 2004 (see Securities Market Legislation Assessment Project).

These laws are measured against international standards and best practices as the Objectives and Principles of Securities Regulations published by the International Organization of Securities Commissions (IOSCO). The nature and content of the securities markets framework varies from jurisdiction to jurisdiction depending on the different legal traditions across the EBRD’s countries of operation. Nevertheless, these laws need to comply with international standards and best practices as they give a measure of soundness of the legal framework and of the degree of investors’ protection in a given country.

This need has led the EBRD to define a set of 10 core principles  (0.1Mb) for a securities market framework (SMF). By virtue of being “core” principles, these cannot be exhaustive but are intended to form the foundation of a SMF. These principles are based on international standards and best practices, and therefore can assist in assessing a country’s SMF in identifying the need for reform. These principles are meant as guidelines only and identify the results to be achieved rather than the process by which to achieve them. Invariably, exceptions to these principles may have to be made in the contect of a given country's legal system.

If you have any comments or questions regarding this statement, please contact the EBRD’s corporate governance and capital markets specialist, Gian Piero Cigna, on +44 0207 338 7087 or at cignag@ebrd.com