Unofficial translation (c) Soyuzpravoinform LLC

RESOLUTION OF BOARD OF CENTRAL BANK OF THE AZERBAIJAN REPUBLIC

of January 31, 2024 No. 06/4

About approval of "Procedure for application of specific mode of regulation"

Based on articles 22.1.17 and 50 of the Law of the Azerbaijan Republic "About the Central bank of the Azerbaijan Republic" the Board of the Central bank of the Azerbaijan Republic DECIDES:

1. Approve "Procedure for application of specific mode of regulation" it (is applied).

2. Charge to Legal department to provide in 3-day time submission of this Resolution to the Ministry of Justice of the Azerbaijan Republic for entering into the State register of legal acts of the Azerbaijan Republic.

Approved by the Resolution of Board of the Central bank of the Azerbaijan Republic of January 31, 2024, No. 06/4

Procedure for application of specific mode of regulation

1. General provisions

1.1. This Procedure is developed according to article 50 of the Law of the Azerbaijan Republic "About the Central bank of the Azerbaijan Republic" and determines procedure for application of specific mode of regulation in the financial markets.

1.2. The purpose of application of specific mode of regulation is testing in the test mode of innovative services and products (further - innovative products) for their representation in the financial markets and in case of success of result of testing acceptance of adequate measures in the direction of enhancement of regulatory framework for their permanent presentation.

1.3. The specific mode of regulation is applied on the basis of the following principles:

1.3.1. ensuring equal participation in specific mode of regulation;

1.3.2. providing with the participant of specific mode of regulation of protection of the rights and legitimate interests of consumers.

2. Concepts

2.1. The concepts used in this Procedure have the following values:

2.1.1. specific mode of regulation - set of the rules regulating testing of innovative products in the financial markets in limited framework and under control of the Central bank of the Azerbaijan Republic (further - the Central bank);

2.1.2. innovative product - the services and products meeting the requirements, the stipulated in Item 3.1 presents of the Procedure;

2.1.3. testing - the presentation of the innovative product on terms of the contract concluded between the participant and the Central bank within specific mode of regulation;

2.1.4. the applicant - the legal entity who underwent state registration in the Azerbaijan Republic addressing to the Central bank for testing of innovative product in the territory of the Azerbaijan Republic;

2.1.5. the participant - the applicant who signed the contract with the Central bank for carrying out testing of innovative product within specific mode of regulation;

2.1.6. the user - the client acquiring (using) or intending to acquire (to use) the innovative product provided in specific mode of regulation;

2.1.7. civil faultlessness - the fact of compliance of beneficial owners of the applicant, persons performing managerial functions, and also owners of considerable share in the authorized capital, the head of its executive body if this owner is the legal entity, to requirements of article 17 of the Law of the Azerbaijan Republic "About fight against legalization of the property received in the criminal way, and terrorism financing" (further - the Law);

2.1.8. the strategy of exit - the plan including measures of exit of the participant from the market in case of the termination of its participation in specific mode of regulation.

2.2. For the purposes of this Procedure for the concept "beneficial owner" and "considerable share" have the values given in the Law.

3. Requirements to participation in specific mode of regulation, application to participants of the mode of the legislation and control

3.1. Innovative product for testing within specific mode of regulation and the applicant shall meet the following requirements:

3.1.1. the innovative product shall be new to the local market and increase financial inclusivity in the market, to be safe and more available to users of financial services;

3.1.2. the innovative product shall be ready to testing in the real mode;

3.1.3. in case of success of result of testing the applicant shall have intention to implement innovative product in the Azerbaijan Republic;

3.1.4. implementation of innovative product shall not create potential systemic risks and shall not increase possibilities of legalization of the property received in the criminal way and terrorism financings;

3.1.5. risk analysis of innovative product shall be carried out, measures for prevention of possible risks, including violations of confidentiality of these users and their legitimate interests are determined;

3.1.6. the beneficial owners of the applicant, persons performing managerial functions and also owners of considerable share, the head of its executive body, if this owner is the legal entity, shall have civil faultlessness;

3.1.7. the applicant shall have sufficient financial and human resources, and also necessary infrastructure (processing equipment, information system etc.) for the safe presentation of innovative product.

3.2. Application conditions concerning the participant and (or) innovative product of the current legislation regulating the financial markets are:

3.2.1. activities of the participant are free from licensed or allowing requirements;

3.2.2. the legislation regulating the financial markets, including the existing prudential standard rates and requirements are not applied to the participant and (or) innovative product, are applied partially or are applied otherwise.

3.3. Control of activities of the participant from the Central bank is exercised by application of one or several of the following forms:

3.3.1. obtaining and analysis of periodic activities reports of the participant;

3.3.2. monitoring of activities of the participant;

3.3.3. implementation of test purchase of innovative product for the purpose of protection of the rights of users;

3.3.4. check of activities of the participant.

3.4. Depending on nature of the violations revealed in activities of the participant, or circumstances which can become cause of infringement the Central bank performs the following corrective actions:

3.4.1. reclamation of the letter obligation in which measures which need to be accepted for elimination of violations or circumstances which can lead to violations, and terms of their realization are reflected;

3.4.2. giving instructions, obligatory for execution, about elimination of violations or circumstances which can entail violations;

Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info