ANNUAL REPORT JUNE 2010
FEDERATION OF EURO-ASIAN STOCK EXCHANGES
NATIONAL DEPOSITORY CENTER OF AZERBAIJAN
AFFILIATE MEMBER
National Depository Center has gone
through significant functional, structural
and operational reforms during the 2009.
Bakhtiyar Azizov
Chief Executive Officer
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 international
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 Committee for
Securities of the Republic of Azerbaijan.
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 in registry keeping, depository services
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 itemized
action plan for the depository system conversion.
The strategic vision of the NDC aims to achieve the
following objectives:
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.
•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 58 for the Azerbaijani country report.
CONTACT INFORMATION
Contact Name Rasim Mammadov E-mail [email protected]
Address 19, Bul-Bul Avenue, Baku AZ1000 Azerbaijan
Website www.mdm.az
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