Negotiations have been launched to open a pool account of Azerbaijan's National Depository Center (NDC) at Euroclear and Clearstream, the main depositories in the European market, a source in NDC told Trend.
The source pointed out the operational volumes required during the membership process for international depositories and the economic efficiency of securities held based on this membership should be considered as key factors.
The source emphasized that when exploring membership opportunities with Euroclear and Clearstream, the level of interest from local market participants and the volume of securities to be held in these depositories are the main factors taken into account.
"Furthermore, for membership in such international depositories, the institution’s risk management policy, procedures for anti-money laundering and counter-terrorism financing (AML/CFT), and compliance with international standards must be fully aligned with international requirements.
The relatively low interest of domestic market participants in securities issued in European markets has led to insufficient volumes being formed for membership in international depositories and has prevented the NDC from establishing infrastructure with these depositories. However, recent demand from local market participants has given momentum to activating operations in this direction.
In this regard, as part of the measures taken, the NDC has aligned its risk management procedures with international standards, restructured its AML/CFT policy, and the internal regulations arising from this policy.
The NDC has started negotiations with Euroclear and Clearstream and will initiate the official application procedure to open a pool account with these depositories after fully meeting the mentioned requirements. It should be noted that the process of accepting membership and activating the account at these depositories is a long-term procedure.
This cooperation will accelerate the integration of the Azerbaijani capital market into the international financial system and ensure the more secure custody and economically efficient management of local investors' assets in foreign markets," the source added.
