FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT JUNE 2012
NATIONAL DEPOSITORY CENTER OF AZERBAIJAN
National Depository Center has gone
through significant functional, structural
and operational reforms during the 2009.
Bakhtiyar Azizov
Chief Executive Office
National Depository Center has gone through
significant functional, structural and operational
reforms during the 2009. Despite the global
economic and financial downturn, NDC not
only finished the year with an operating profit,
but also put a great emphasis on material and
technical advancement of the organization.
The value of the assets kept in custody by the
National Depository Centre neared AZN 3.3 bln.
At present, NDC serves approximately 1300
issuers, circa 100 000 investors and 10 broker
organizations.
In order to ensure proper and transparent
registration of the transactions in accordance
with internationally accepted principles the
NDC started implementing the International
Financial Reporting Standards, including
Brief History
The concept of National Depository System
was first introduced in the “State Program of
privatization of the state ownership in Azerbaijan
Republic 1995-1998”. In accordance with the
State Program the Depository System was
formed for regulated holding of de-/materialized
securities, leading of shareholders registers,
registration of owners of securities as well as
transactions with them and also for rendering all
other depository services. In order to advance
the Depository System and its regulatory
framework, the presidential degrees “On the
National Depository System” and “On the
Rules on leading of the shareholder’s registry
of the joint-stock companies created during the
privatization of the state firms and specialized
check investment funds” were adopted in 1997.
The creation of the National Depository Center
was stipulated by the provisions of “On the
National Depository System” regulations.
On the 18 September, 1997 The National
Depository Center was created. The National
Property Committee acted as a holder of 100%
shares of the National Depository Center. The
shares of NDC were then handed over to the
State Committee for Securities after its creation
in 1999. As a result NDC was newly founded
by the State Committee for Securities on the
8 September 1999 and passed the national
registration on 17 September 1999. The National
Depository Center has a license on depository
and registrational activities granted by the State
international financial reporting, accounting
and auditing standards. Under the market’s
institutional strengthening strategy, the process
of transforming the NDC into the centralized
depository for the corporate and public
securities is being closely consulted and
guided by a number of international experts
and institutions, and we constantly work on new
projects with them.
Joint projects with the Islamic Development
Bank, Turkey’s IMKB Takasbank central
depository, EU’s TACIS Project, World Bank
etc are just another illustrative evidence of the
above mentioned.
Measures to advance our technology platform
undertaken in 2009, as a constituent element of
our business processes optimization strategy
Committee for Securities of the Republic of
Azerbaijan.
Since December 22, 2004, the NDC joined
the Association of Eurasian Central Securities
Depositaries (AECSD) as a full member. On
November 17, 2006 the NDC came into global
partnership agreement with the Association of
National Numbering Agencies (ANNA) and was
appointed as a National Numbering Agency.
NDC is also member of International Securities
Services Association (ISSA).
According to the regulations “On the National
Depository System” the National Depository
Center is the state organization, which plays the
main role in the National Depository System,
engaging the depository activity and carrying
records of other depositories that are included
in depository system of the country.
Future Outlook
On the early stages of the stock market
development the National Depository Centre
carried out the function of keeping registry of
shareholders and depositing shares of joint-
stock companies formed as a result of the state
privatization program. However, nowadays the
current condition of the stock market demands
infrastructural and systematic advancement of
the Depository. Having examined the challenges
coming from the today’s stock market and
analyzed internal capabilities, the NDC has
worked out a strategic vision and prepared the
in registry keeping, depository services or
any other services rendered, were utterly
efficacious for protecting investors rights as
well as increasing the protection level of kept in
custody assets.
One of the ambitious tasks that the NDC
sets for itself in 2010 is to start implementing
electronic settlement and clearing services
of reciprocal obligations between market
participants involved into securities trading.
This will surely increase not only transactional
responsiveness, but also transparency and
security of operations.
We believe we can expect an intensive and
seminal 2010 ahead and infrastructural
advancements will be principal mission and the
highest aim for us.
itemized action plan for the depository system
conversion. The strategic vision of the NDC
aims to achieve the following objectives:
• To stimulate institutional development of the
NDC by implementing the globally accepted
Corporate Governance standards;
• To launch large-scale clearing operations in
order to ensure the synchronized securities
and funds entitlements settlement;
In order to reach its strategic objectives, the
NDC plans to implement the following projects
and arrangements:
• To improve the organizational structure of
the Depository and to accommodate it to the
strategic vision and action plan;
• To implement the highest corporate
governance standards;
• To refine internal audit and controlling
channels;
• To arrange systematic Risk Analysis and
Management approach;
• To re-regulate internal document
management procedures;
• To create feasible electronic transmission
links with the Baku Stock Exchange;
• To join SWIFT network;
• To implement paperless documentation
turnover with the professional participants of
the Market;
• To create effective electronic Customers
Inquiries Management network.
* Please refer to page 32 for the Azerbaijan country report.
CONTACT INFORMATION
Contact Name Rasim Mammadov E-mail [email protected] Website www.mdm.az
Address 19, Bul-Bul Avenue, Baku AZ1000 Azerbaijan
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