Uzbekistan: Feasibility Study for a Unified Financial Infrastructure serving the Tashkent International Financial Centre

Project Description

Rationale

Uzbek financial markets are growing rapidly, but face persistent challenges related to the depth of the investor base and the financial sophistication of local companies. At the same time, demand for Uzbek securities on international markets remains strong, and undersupplied in part due to foreign investors’ lack of access to the domestic market. In this context, the Uzbek authorities have recently announced the establishment of the Tashkent International Financial Centre (“TIFC”), which will constitute a separate jurisdiction using English Common Law with favourable conditions for foreign investor participation. Key priorities include the creation of an independent regulator and of the TIFC court, as well as determining the terms and arrangements of the financial infrastructure that will serve TIFC participants.

In other instances of dual market structures, financial infrastructure issues have required careful consideration, as various models have emerged for the interaction between the infrastructure serving the main market and the international centre jurisdiction. These considerations concern both the technology and institutional capabilities of the infrastructure, and its legal and supervisory framework. In Uzbekistan, it will be important to leverage the potential of the international centre jurisdiction for attracting foreign investors, while avoiding issues of fragmentation that can reduce market activity and liquidity in the long term.

Against this background, the EBRD intends to conduct a feasibility study to determine the legal and infrastructural arrangements necessary to unify TIFC participants and domestic market participants into a single liquidity pool, drawing on lessons from peer dual market structures.

Technical Assistance Services

As a result, the EBRD intends to conduct two parallel projects to assist authorities in (i) determining the optimal financial infrastructure arrangements that can serve both TIFC participants and domestic participants, and (ii) the associated legal, regulatory and supervisory framework required to support these arrangements (the “Project”). The EBRD will be seeking to engage consulting services from a company or consortium of companies specialised in capital market infrastructure to undertake the first assignment and a legal services firm or consortium of firms to undertake the second assignment of the Project.

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

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